Unlocking Home Appraisals: What Every Buyer and Seller Needs to Know

Ever wondered what role appraisals play in the home-buying journey? Is an appraisal just another box to check—or could it make or break your real estate deal? In this episode of Your Real Estate Mama, Jan Scott unravels the mystery of home appraisals, explaining why they matter, how they work, and how they protect buyers, sellers, and lenders alike. Whether you're buying your first home, selling a beloved property, or just curious about real estate, this episode is packed with insights you don’t want to miss.

What You’ll Learn:

• What a home appraisal is and why it’s critical in real estate.
• When you need an appraisal (and when you don’t).
• How appraisers determine a home’s value using comps, location, and condition.
• The difference between appraisals and home inspections.
• Options if an appraisal doesn’t match the purchase price.
• Modern trends in appraisals: desktop and drive-by options.

Key Topics Discussed:

• Definition of an Appraisal: What it is, who performs it, and why it’s necessary.
• When You Need an Appraisal: Mortgage requirements, cash deals, and waivers.
• How Appraisals Work: The role of comps, home condition, and location.
• Agent and Appraiser Interactions: What’s allowed, what’s not.
• Challenges with Low Appraisals: Handling discrepancies and protecting your investment.
• Tech-Driven Appraisals: Desktop and drive-by methods explained.
• Appraisal Contingencies: Protecting yourself in a competitive market.
• Mama Wisdom and Inspiration: A heartfelt story about value and legacy, featuring Jan’s father.

Show Resources:

• Follow Jan on Facebook: @yourrealestatemamapodcast
• Email Questions: Jan@YourRealEstateMama.com
• Bible Verse Mentioned: Jeremiah 29:11 – "For I know the plans I have for you..."
• Quote of the Episode: "Appraisals don’t just determine a home’s value—they help us reflect on the value we create in our own lives."

Inspirational Story Highlight:
Jan shares a touching story about her father, his determination to rewrite his life’s narrative, and the legacy of love, faith, and hard work he left behind. This lesson reminds us that no matter where we’ve been, we have the power to embrace change and step into a hopeful future.

Conclusion:
Appraisals may not be glamorous, but they’re a cornerstone of smart real estate decisions. Whether you’re buying, selling, or just dreaming about your future home, understanding the appraisal process can save you money and heartache. Remember, value is about more than dollars—it’s about the life you build.

Until next time, happy house hunting—and as Jan says,

Follow for Real Estate Tips and Expert Advice!
Looking to buy or sell a home? Tune in for real estate tips, expert advice, and real-life stories to help you navigate the housing market with confidence! 🏡 Plus, get a little mama wisdom to make your home journey smoother.

Have Real Estate Questions or Comments?
I’d love to answer them in an upcoming episode! Don’t hesitate to reach out with your real estate questions, whether it’s about buying, selling, or getting your home ready for the market.

Need a Trusted Realtor?
Connect with me to find a trusted and experienced realtor in your area. Whether you're a first-time home buyer or a seasoned seller, I’m here to guide you every step of the way.

Email: jan@yourrealestatemama.com
Follow on Facebook: @YourRealEstateMamaPodcast

Transcript

[00:00:00] Introduction to Home Appraisals
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Well Today we're diving into the mysterious world of home appraisals. Now don't roll your eyes or tune me out just yet. This is a critical step in the home buying process. So grab your coffee or whatever fuels your home buying dreams. And let's get to it.


[00:00:22] Meet Your Host: Jan Scott
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Hey there. Welcome to Your Real Estate Mama. I'm Jan Scott, and I'm here to help you navigate the real estate world. The Ups and Downs of Buying or Selling a Home. I've been wrangling the real estate market for over 35 years, and trust me, with all this gray hair comes a whole lot of wisdom. I'm excited to share tips, a little humor, and plenty of encouragement to make your journey easier.

Whether you're new or a regular, I'm so glad you're here. Follow the show for new episodes every week, and together we'll grow and help even more folks.


[00:00:58] Understanding Home Appraisals
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What exactly is an appraisal? Imagine your lender as a cautious friend who refuses to let you overpay for your dream home. That's where an appraisal comes in.

It's a professional opinion on what a home is really worth in today's market. Think of it as an honest fact checker of the real estate world. A licensed appraiser swoops in like a referee in a ball game and gives you an unbiased verdict on the home's value. They don't work for you. They don't work for the seller or anyone else involved.


[00:01:33] The Appraisal Process
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Do you have to get an appraisal? Well, if you're financing your home with a mortgage, the short answer is yes, you probably do. Lenders want to make sure that the home's value matches or exceeds the amount you're borrowing. This helps them calculate the loan to value ratio, they call it the LTV. Lenders prefer this number to be 80 percent or less.

That kind of gives them the warm and fuzzy feeling about their investment. Now if you're paying cash, which is lucky you, you can skip the appraisal. But even then, it's a good idea to get one so you're not overpaying. In some cases, buyers might waive the appraisal requirement altogether just to make their offer more attractive.

It's a calculated risk. This is where your realtor can really be a big help to you. They can pull current sold slash closed comps directly from the MLS, and that can save you the appraisal fee. So if you've got a good realtor, They can pull the closed sales for the last 90 days. They can give you a really good estimate at what that home could be valued at.

So that can save you on an appraisal. Now, there are times when you may pay cash and you may want to go ahead and pay for an appraisal. So it just depends on area, condition, and square footage. What does the appraisal actually do? Well, appraisers are like detectives. They dig into the home's condition, recent renovations, amenities, location, and even the neighborhood vibe.

They also use comps. which is recently sold homes within the same area with similar features to help determine the home's value. It's all about backing up their judgment with solid evidence. Now, here's a tip. There's no two appraisers that approach things the exact same way, but they all have to stay independent, unbiased, and know their place.

They won't be swayed by cookies or compliments from your agent, though that doesn't stop some people from trying. Now, appraisals do not replace home inspections. They are not there to check the bones of the property, just value as it sits. If the condition of the property is bad, The appraiser will take that into consideration when comparing it to other properties.

I had a listing one time that was located in a prime area of town, but the house needed a whole lot of work and I'm talking about a complete remodel including replacing rotting wood. We had already done our homework in getting the pricing for the remodel because we didn't want to be over invested in the property after the remodel.

So our strategy on that type of home was different than on a normal home in normal conditions.


[00:04:27] Types of Appraisals
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Do appraisals always happen in person? Well, not always. You know, while the traditional appraisals involve an in person visit where they come and you've got to let them in and they walk through and take pictures of the inside of the house, we're in the age of tech.

There are desktop appraisals, which allows appraisers to collect your data remotely and chat with agents or other reliable sources about the property. So if you see an appraiser with a laptop instead of a clipboard, don't panic. It's just the modern way of doing things. I have had appraisers call me directly and talk to me about a closed sale, which on paper doesn't seem correct.

And I had to explain to him why we price the home higher than in most neighborhoods. There was maybe something that the seller had added to it. We increased the value, you know, a pool or maybe an extended outdoor, um, room with a kitchen. Those are going to be the exceptions that maybe this house is going to bring 10 more than the house, two houses down.

You also may get a drive by appraisal. And maybe a comp neighborhood where all the homes, well, we always call them cookie cutter neighborhoods. They're kind of new. The homes are exactly identical. There's really a lot of good data with comps that have sold in the last six months. Uh, they don't really need to come out and take a look.


[00:05:57] Agent and Appraiser Interaction
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Can your agent talk to the appraiser? Absolutely. But there's a fine line here. Your agent can share helpful property details or comparables, but they can't bribe, bully, or sweet talk the appraiser into a higher valuation. Sorry, charm doesn't work here, but appraisers are like fortresses of professionalism.

They're required to keep everything above board. Most appraisers prefer that you go through the lender with questions instead of calling them direct. Some will not talk directly to the buyer's agents because he doesn't want any possibility of anyone thinking that he's been influenced. Appraisers also have guidelines that they have to go by.

So when they put an appraisal together, they are going through a set of rules that they have to go by to make sure that everything matches.


[00:06:50] Dealing with Appraisal Outcomes
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If the appraisal doesn't match the purchase price, what happens then? This is kind of where things can get sticky. If the appraised value is lower than the agreed upon price, it might affect how much your lender is willing to give you.

You can protect yourself by including an appraisal contingency in your contract. That way, if the numbers don't add up, you have an out. But hey, not everyone uses an appraisal contingency, especially in a competitive market. It's all about your risk tolerance and how much money you're putting down. What happens if the home comes up short and doesn't match the contract price?

Well, that will depend on what type of loan you're getting, and how much your down payment is, and of course your lender. Some examples would be, let's say the contract price is 325, 000 and you're putting 20 percent down, which is roughly 65, 000. And the home only appraised for 315, 000. Chances are your lender will approve and let you close if you really want the house that bad to pay 10, 000 above appraisal.

I have had buyers who wanted the house that bad to do it. And on the other hand, if you're getting a VA loan, The home must appraise for sales price or greater, or it's a no go. Chances are you're getting a 100 percent loan with a VA loan, so there's no room for error. Will you see the appraisal report?


[00:08:22] Appraisal Report and Disputes
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Yes. By law, lenders must send you a copy of the appraisal once it's completed. If your lender waived the appraisal requirement, though, don't expect any paperwork. So if you're dying to know what the appraiser thought of your future palace, rest assured you'll get the full scoop. What if you think the appraisal is wrong?

Well, if the appraiser missed something important or didn't use the best comps, you can request a reconsideration of value. They call that a ROV for short. This is basically your chance to say, Hey, let's take another look. Your lender will guide you through the process and your agent could help gather the necessary information.

Let's say you're selling a home and you've sold it for say 10, 000 more than what it appraised for. And the appraiser is not giving you the value. You do have the opportunity to go back and get your agent to help you bring comps in to make sure he has researched and got the best possible comps there is to support your value.

And if you suspect the appraiser was biased or made a major error, you can file a complaint with the state or federal agencies. You've got options.


[00:09:35] Conclusion and Personal Story
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And there you have it. Appraisals may not be the most glamorous part of buying a home, but they're a big deal. They keep everyone, buyers, sellers, and lenders on the same page.

Plus, they can save you from a bad deal. As we've learned today, appraisals play a vital role in determining a home's worth. But when I think about value, I'm reminded that it's not just about dollars and square footage, it's also about the life stories and lessons that shape us.


[00:10:07] Final Thoughts and Inspiration
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That brings me to this week's Mama Wisdom and Inspiration.

I want to share a story about my dad, someone who taught me the true meaning of value.

Let's take a moment to reflect on the kind of legacy we're building, both in our homes and in our lives. My dad was an extraordinary man, though I didn't fully realize it until I was much older. He came from a challenging background. One of nine kids, they were raised in poverty. In a family where church was not a priority, and alcohol was a frequent companion, but his story didn't end there.

After serving in World War II, Dad made a choice. He left behind the bar hopping and destructive habits of his youth, deciding instead to build a new legacy when he married my mom. That decision changed not only his life, You know, my childhood was filled with joy, adventure, and love. We spent Saturdays fishing, weekends camping, and countless hours hunting old treasures at the local junk dealer.

He taught me to work hard, problem solve, and find beauty in simplicity. He never once said, I can't. His determination, creativity, and faith always carried him through. Every morning, my dad would wake me up with a kiss on the forehead and a cheerful, time to get up, sweetheart. Well, that simple gesture spoke volumes about the love and care he poured into our family.

Through it all, dad leaned on the Lord and never wavering in his belief that God would provide. Well, here's the lesson my dad taught me, and I hope it speaks to you today. No matter where you've been or what you've faced, you can choose a different path. You can rewrite your story. Life is unpredictable, but your response to it can make all the difference.

In Jeremiah 2911, It reminds us of God's promise for I know the thoughts and plans I have for you says the Lord plans for peace and well being Not for disaster, but to give you a future and a hope so as we close today Let me ask you what about your life? Is it time to focus on the positive and the positive?

To believe in hope and to step into the life God has planned for you. Remember, it's never too late to make a change, to embrace gratitude, and to trust that the best is yet to come.


[00:12:41] Show Wrap-Up and Contact Information
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Well, that's a wrap. Follow the show for new episodes every week. Don't forget to leave a review, rating, or comment on your favorite podcast platform. Feel free to send me an email to Jan@YourRealEstateMama.com. I love hearing your questions and comments, and I'd be happy to help you find a great real estate agent anywhere you live.

Be sure to follow me on Facebook @YourRealEstateMamaPodcast. Until next time, y'all take care, happy house hunting, and remember, you should always listen to your mama.