What to Expect During a Home Appraisal in the Pensacola Area

An appraisal is a licensed appraiser's opinion of what a home is worth, and the lender needs it before it will lend. A home appraisal in Pensacola confirms that the home supports the price the buyer agreed to pay. If it does, the deal moves forward. If it comes in low, the buyer, the seller or both have decisions to make.

Vivian Corwin is a bilingual Realtor and Military Relocation Professional with IXL Real Estate in Pensacola, FL, helping military and relocating families buy and sell homes across Pensacola, Pace, Milton, Gulf Breeze, and Navarre. Because so many buyers here use VA loans, I spend a lot of time making sure appraisals do not become the reason a deal falls apart.

• Recent sales of similar homes nearby. These comparable sales, or comps, carry the most weight.
• Size and layout. Square footage, bedrooms and bathrooms.
• Condition and updates. A new roof or HVAC system counts. So does needed work.
• Location. The street, the neighborhood and what surrounds the home.

The appraiser visits the home, measures it, takes photos and notes its condition. Then they compare it to the recent sales and write a report for the lender.

A VA appraisal does two jobs. It sets the value, and it checks that the home meets VA's minimum property standards. The appraiser looks for things like a sound roof, working systems, safe access and no signs of wood-destroying insects. If something fails, it usually has to be fixed before the loan can close.

I review every home against VA standards with the listing agent before my buyers make an offer. It keeps buyers from spending money on an inspection and appraisal for a home that cannot close. My page on VA and military buyers explains the process.

A low appraisal does not have to end the deal. The usual options are:

• Renegotiate the price to the appraised value or somewhere in between
• The buyer pays the difference in cash, if they have it
• Challenge the value by sending the appraiser better comparable sales
• Walk away, if the contract gives the buyer that right

A challenge works when the appraiser missed a sale that should have counted. I once helped a client challenge a low VA appraisal in writing, and it was overturned. She went from paying $3,000 a month in rent to owning her home for a lower monthly payment.

• Make small repairs and clean before the visit
• Give your agent a list of updates with dates, like a new roof or HVAC
• Make sure the appraiser can reach every room, the attic and any outbuildings
• Price the home with the appraisal in mind from the start

That last point matters most. A price the recent sales cannot support sets up a low appraisal before it happens. My post on why pricing too high can hurt your Pensacola home sale covers it, and so does the pricing step of how I sell homes.

An appraisal gap is the difference between the contract price and the appraised value. If a home is under contract for more than it appraises for, someone has to cover that gap or the price has to change. Some buyers agree up front to cover part of a gap in cash, which can make an offer stronger in a competitive situation. It is a real commitment, so it only makes sense when the buyer has the cash and understands the risk. VA buyers in particular should think carefully before agreeing to one, since the whole point of the loan is often to keep cash in the bank.

Know the recent sales before you offer, so your price is one the appraisal can support. If you are using a VA loan, check the home's condition against VA standards before you go under contract. And read your contract's appraisal terms, so you know your options if the value comes in low.

How long does an appraisal take?

The visit itself is often under an hour. The written report takes longer and goes to the lender.

Who pays for the appraisal?

Usually the buyer, as part of their loan costs, though it can be negotiated.

Can a low appraisal be challenged?

Yes. If the appraiser missed relevant comparable sales, they can be submitted for reconsideration. It does not always change the value, but it can.

Is an appraisal the same as a home inspection?

No. An inspection checks the home's condition for the buyer. An appraisal sets the value for the lender, though a VA appraisal also checks certain condition items.

Vivian Corwin is a bilingual Realtor and Military Relocation Professional with IXL Real Estate in Pensacola, FL, helping military and relocating families buy and sell homes across Pensacola, Pace, Milton, Gulf Breeze, and Navarre. Whether you are buying or selling in Pensacola, Pace, Milton, Gulf Breeze or Navarre, I will walk you through it before you decide anything. Sellers can start with what your home is worth.

Schedule a time to talk with Vivian.