A home appraisal might not be the most glamorous part of selling or redesigning your home, but it’s definitely one of the most important. Whether you’re getting ready to list your property or considering a remodel, understanding how your home is valued can shape key decisions—from pricing to renovation priorities. Let’s break down what you need to know.

What Is a Home Appraisal?

A home appraisal is an unbiased professional evaluation of a property’s market value. Appraisers are licensed experts who use recent sales, local market data, and a visual inspection of the home to come up with a number. That number matters—a lot. It impacts what buyers can borrow, what you can list your home for, and whether you might want to rethink that kitchen remodel.

Appraisals are typically required during the home-selling process, especially when a buyer is using financing. Lenders want assurance that the property is worth the amount being borrowed. But appraisals aren’t just for sellers. They can be helpful if you’re refinancing, contesting property taxes, or planning a major redesign.

When Does an Appraisal Happen?

Usually, an appraisal is ordered after a home goes under contract. A lender hires an appraiser to verify the agreed-upon sale price. That means the timing can be tight. If you’re curious about the home appraisal turnaround time, it typically ranges from a few days to a couple of weeks, depending on your location and how busy the market is.

But you don’t have to wait until your home is under contract. Some homeowners choose to get a pre-listing appraisal to better understand their home’s value and position it competitively.

What Do Appraisers Look For?

The appraisal isn’t just about square footage. Appraisers consider a range of factors:

• Comparable sales: Similar homes recently sold in your area
• Location: Proximity to schools, amenities, and neighborhood trends
• Condition: General upkeep, age of major systems (HVAC, roof), and recent upgrades
• Design features: Layout, functionality, and quality of materials
• Energy efficiency: High-performance features can add value

For example, homes with Accessory Dwelling Units (ADUs) in California had a median appraised value of $765,000, compared to $650,000 for similar properties without ADUs, according to the Federal Housing Finance Agency.

How to Prepare for a Home Appraisal

You can’t change your neighborhood or square footage overnight, but you can make a solid impression. Here’s how:

• Declutter and clean: A tidy home shows better and helps the appraiser see its full potential.
• Handle minor repairs: Fix that leaky faucet or cracked windowpane.
• Document upgrades: Have receipts or records of major improvements handy.
• Boost curb appeal: First impressions count—tidy landscaping goes a long way.
• Highlight certifications: Got energy-efficient upgrades? A Pearl Certification can help your home stand out. Certified homes have sold for up to 5% more in some markets.

The Impact of a Low Appraisal

Not all appraisals match the contract price. In fact, about 9% of homes are appraised below the agreed sale price. And that can cause problems.

• Deals can fall through: Low appraisals contributed to 9% of failed home sales in 2023, according to the National Association of Real Estate Brokers.
• Buyers may have to pay the difference: In 12% of transactions, buyers covered appraisal shortfalls out-of-pocket.
• Appraisal gaps are common in starter homes: These tend to experience higher rates of valuation discrepancies, according to MarketWatch.

A second opinion may be worth it. In one case, a $750,000 home was initially appraised at $698,000. A follow-up appraisal valued it at $785,000—a staggering $87,000 swing.

Why It Matters Before You Redesign

Thinking about redoing your kitchen or adding a deck? Get an appraisal—or at least study recent comps—before starting. That data gives context. For example, homes in Omaha appreciated by 60% over 20 years, with one school district seeing an 85% increase, per a University of Nebraska study.

Knowing your home’s current value can help guide which updates are likely to pay off and which might not move the needle. Why spend $50,000 on a remodel that only increases value by $20,000?

Appraisals and Equity Gaps

Appraisals are not always fair. The NAREB reports that homes in predominantly Black neighborhoods are often appraised 15% lower than similar homes in predominantly White areas. These disparities can impact generational wealth, refinancing options, and long-term financial outcomes.

It’s an issue that needs attention—and one more reason to understand how your home is being evaluated.

Final Thoughts

A home appraisal isn’t just a formality. It’s a key piece of the puzzle whether you’re redesigning, refinancing, or getting ready to sell. Appraisals reflect how the market sees your home—and that insight can save you money, headaches, and regret down the road.