Real Estate 101: Everything you Need to Know about Appraisals

As we continue through our Real Estate 101 series, our aim is to uncover the gray areas and industry-specific terminology that might cause confusion so that you–as the buyer or seller of your home–feel informed and empowered in your real estate journey. One step of the contract process that is intimidating for many people is appraisals. What is an appraisal? When should I contact an appraiser, and what exactly will the appraiser do for me?



If these questions have crossed your mind, you’ve come to the right place. Our resident expert Robin Woodall has years of experience in appraising, and we’re tapping into her knowledge and wisdom to share her insight with you. 


Prior to Robin becoming a real estate agent and Associate Broker of Broad & Main, she was President of North Georgia Appraisals for 12 years. This unique stepping stone gives her perspective as an agent. Knowing the value of a home is VITAL to accurate pricing and she always tells her clients to “price the home to appraise.” The key here is that you can get a great offer with your purchase price, but if it doesn’t appraise, the process can end there.  


What does an appraiser do? How can they help me?

home appraisals


When buying a new home, one thing is generally true–the more knowledge the buyers have, the better.


One obstacle that often arises in this process is the gap between the seller’s asking price and the actual value of the home. This is an important step to cover, especially if you are expecting to buy your home through financing from a lender.


An appraiser is a professional who comes in to fill that gap. According to, “An appraiser’s job is to determine the current value of a property for the potential buyer. Most of the work to determine the value of a real estate appraisal is done during an on-site inspection.”


What is included in an appraisal? 

An appraiser simply gives an opinion of value based on multiple variables including the following:

home appraisals


Most residential properties are evaluated by what is known as the Sales Comparison Approach. An appraiser will use market data of similar homes that have sold within the neighborhood or a certain distance–usually a 3 mile radius–of your home over the last 6-12 months, as well as other factors (see image above).


home appraisals

How does an appraiser find the most accurate numbers?


The homes included in the appraisal are those that are considered most similar to your home. For example, if you are selling a ranch home, the comparable sales should be other ranch-style homes. A two-story house with a basement would not provide an accurate comparison.


One Step Further:

Appraisers then make adjustments based on the features and characteristics of the comparable homes. Using our previous example, let’s say your ranch-style home has three bedrooms and 1 bathroom. One of the comparable homes is very similar in size to your home but has 4 bedrooms and 2 full baths. The appraiser can use this property as a comparable (a.k.a. “comp”), but adjustments would need to be made for the differences.


home appraisals

When do appraisals need to take place? Is there a right time?


Your lender will order an appraisal once you are out of due diligence and you know you are definitely moving forward with the purchase of the home. The lender does this because they need to know that the house is worth the amount they are loaning you.



If a homeowner makes a new improvement, will it provide a 1:1 ratio of value to the home? For example, if the owners spend $25,000 to add a pool, will it add $25,000 to the value of the home? 


Unfortunately, this is not always the case. Even if you spend more $$$, the value can sometimes only add half the amount or less to the value. Every property, improvement, and value add is unique.


“Never assume you are going to get your money back when you sell. I always tell my clients, don’t ‘over improve’ your home. Always think resale when you make those decisions. Some people buy homes that they only intend to stay in for a couple of years. If you are going to make improvements, make the ones that will add value to your home.” – Robin Woodall

home appraisals

When it comes to home value, negotiations, and the contract process, having the right agent is ESSENTIAL.


Getting an appraisal on a potential home can seem intimidating, but a good agent will know how to guide you through this step. Our team of agents are experts in navigating this process. They have extensive experience in negotiations–and renegotiations–and can confidently lead you to the closing table through any obstacles that might arise.



Are appraisals only necessary if financing or lenders are involved?

home appraisals


Whether you’re planning to take out a mortgage on a home or pay in all cash at the closing table, it is NEVER a bad idea to have an appraisal done during the beginning stages of the contract. This is a necessity for lenders as they decide on the loan amount for the mortgage. However, it is also in your best interest to know that what you’re paying is what the home is actually worth, as is true with any large purchase or financial commitment.



If you have any further questions about appraisals, the contract process or buying and selling in general, please reach out to Robin or our team.


Our philosophy is relationship, and we look forward to starting one with you. 


Broad & Main Real Estate Group