What Buyers Need to Know About Home Appraisals

If you are in the process of buying a home, you come to find that there are a lot of moving parts and tasks that need to be completed in order to have a successful closing. Everyone involved plays an essential role, and if all goes well, then buyer and seller are satisfied.

One crucial piece to the puzzle is the home appraisal. Many people feel overwhelmed navigating and understanding this portion of the home buying process, as it can have a significant impact on the sale of a home. We wanted to provide some helpful information about home appraisals and options that are available to buyers, so that you can be prepared.

What are Home Appraisals?

A home appraisal, in the simplest terms, is an unbiased and well-educated opinion of a home’s value. Mortgage Lenders use the home as collateral for a loan, so determining the market value is vital when securing a mortgage. An appraiser will take many things into consideration when evaluating a home, such as a visual inspection, the neighborhood, comparable sales, square footage of the home, market sales data, public land records, and public tax records.

An appraisal takes place after an offer has been accepted by a buyer, but before the actual closing date. When performing a visual inspection at a home, the appraiser will gather as much information as possible. They are typically looking at health and safety hazards, the structural integrity and condition of the home, any upgrades or improvements, and visible defects, just to name a few.

What Buyers Need to Know

For buyers, there are some things to consider once an appraisal is conducted. If the appraiser finds that the home’s market value is higher than the sale price, you will automatically gain equity in the home, which will benefit you down the road when the house is resold.

However, if an appraiser discovers that the home’s value is lower than the sale price, then the bank will notify the buyers and put the ball back in their court. Because there is a difference in sale price and the market value of the home, buyers need to determine how to move forward. Here are some options for buyers to consider:


Buyers can re-negotiate the sale price of the home with the sellers. Even if you can’t get the price all the way down to the appraised value, getting it closer could be all you need.

Pay the Difference

If you are set on buying the home and believe it is worth it, you can pay the difference out-of-pocket. This will vary from person to person, but if you can afford the cost on top of the committed down payment amount, then this is definitely a viable option.

Move On

We know – this may be heartbreaking, especially if you have found a house that fits your family’s lifestyle. However, being financially comfortable with the sale of a home should be your highest priority, and if you are unsure, then you may need to consider this option.

Blackhawk Bank wants home buyers to be prepared and feel confident in the journey ahead. While the home buying journey can be confusing, we are here to help guide you through the entire process. Are you ready to learn more about how Blackhawk Bank can help you? Contact us today!


Tammy Zurfluh 

SVP Mortgage Banking

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