Understanding an Appraisal

For starters, you need to understand what an appraisal is, how it is being used and why it is being prepared. Appraisal values will differ for insurance purposes, market value assessment or a refinance.  

Having your home appraised is an estimate based on a variety of factors. These factors include nearby homes that have recently been sold and the features of your home such as fireplaces or new windows. On top of that, appraisers will have their own opinions; one may value certain features more or less than other appraisers.

When you’re applying for a loan, a home appraisal may come in lower than you expected. This is commonplace, as the appraiser is accounting for what it would sell for on the open market today, not what you have invested or the original price. 

In terms of insurance, an appraiser values your home against the current market for building supplies, labor and other costs if your home were to be rebuilt today.

 For real estate agents, the time frame of the sale and market experience is factored in to their appraisal.

An appraisal is also subject to change based on the current market. Your home’s value is connected to the economy, meaning a downturn there equals a drop in the value of your home. If your neighborhood has recently reclassified school districts, the appraisal has probably changed too.

One appraisal does not determine the exact value of your home. You can always get further quotes from more appraisers for different purposes or simply at a later date.  

The value of your home is subject to many variables; understanding the process will help you get the most value out of your home. Find information on appraisals, who to speak with and when by contacting your local REALTOR.


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