What the appraisal is
A licensed appraiser inspects the property and compares it to recent sales of similar homes nearby, adjusting for size, condition, lot, and features. The report goes to the lender, not to you as an opinion to negotiate. The value conclusion is an evidence-based estimate of what the home would sell for in a normal market.
What moves the number
Condition and updates carry real weight: kitchens, bathrooms, roof, furnace, windows. Legal second units add measurably because they add income. Finished basements help; unpermitted work can hurt. Curb appeal matters less than people think, but visible deferred maintenance matters more.
- Have a list of updates with approximate dates ready
- Point out the permits for any major work
- Tidy, functional, and complete beats staged and flashy
How to prepare
You are not selling to the appraiser, but friction costs value: make every room, the furnace, the electrical panel, and the attic accessible. Finish the half-done projects if possible, or be upfront that they are incomplete. Provide the legal status of any second unit, because guessing wrong on that changes the valuation approach entirely.
If the value comes in low
Ask your broker to review the report for factual errors: wrong square footage, missed bathroom, comparables from a different neighbourhood. Factual errors are challengeable; honest differences of opinion rarely are. If the number stands, options include a smaller refinance, a second appraisal accepted by a different lender, or waiting for the market and the file to improve.
Frequently asked questions
- Who pays for the appraisal?
- Usually the borrower, typically a few hundred dollars, though some lenders cover it on refinances. Your broker will know which lenders do.
- Is the appraisal the same as market value?
- It is an estimate of market value on the inspection date. In fast markets it can lag reality in either direction, since it relies on completed past sales.
- How long is an appraisal valid?
- Typically sixty to ninety days for lending purposes. After that, expect an update or a new report.