Jeff's Blog


What You Need to Know About Home Appraisals

If you're a first time home buyer or seller, you may have questions about what a home appraisal is and what it can mean to your deal.

Appraisals are important because they determine if homes are 'worth' what the mortgage companies will give for loans. If an appraised home is valued at less than the contract price, the mortgage company will usually allow a loan for the lesser value. This can be stressful and frustrating for buyers and sellers, but it makes sense for mortgage companies who may be concerned about borrowers defaulting on loans.

Your local market conditions play a big role in your home's appraisal, so be prepared. If there are a lot of homes in your area being foreclosed on, you run the risk that they can be purchased for much less than your home, which will bring your value down as well. The reverse can also happen - if your home is valued at less than other homes in the area on the market, you may be able to find buyers quicker.

Appraisals are important but tricky because of how variable they can be depending on the local market conditions. Try not to get discouraged if your home's appraisal isn't what you expect, because as the market improves, so will your home's value.

Jeff Mateja is the CEO/REALTOR at Universal Properties at Keller Williams Realty in Portland, Maine, and founder of, a blog about everything Portland, Maine, and beyond. Jeff also offers two premier home search tools for Buyers via and If you would like further information on any blog topics, please e-mail Jeff Mateja.

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Comment balloon 9 commentsJeff Mateja • May 09 2012 05:48AM


Hi Lenn,

Thanks for pointing that out - I meant to write contract price. Hope you're doing well!

Posted by Jeff Mateja, Southern Maine Real Estate (Keller Williams Realty - Universal Properties) over 6 years ago

Also shows sellers that proper pricing is important so they don't get into a contract only to find out the bank willnot lend on the contract price.

Posted by Kevin Vitali, Helping Massachusetts Home Buyers and Home Sellers (EXIT Realty- Massachusetts Short Sales & Residential Sales) over 6 years ago

Good job Jeff.  This is a very informative post.


Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley,, MD & VA Homes and Real Estate) over 6 years ago

This is good information for buyers and sellers. Great post.

Posted by Gita Bantwal, REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel (RE/MAX Centre Realtors) over 6 years ago

Thanks for the post, you also always have the right to a second appraisal or questions the comps provided.

Have A Great Day!

Posted by Doris Freeman, Broker/Agent, Realtor, Madison-Gibson-Crockett (RE/MAX REALTY SOURCE) over 6 years ago

Hi Jeff, great post. The appraisal process is one that consumers don't usually understand well.

Posted by Sandy Acevedo, RE/MAX Masters, Inland Empire Homes for Sale (951-290-8588) over 6 years ago

I tell clients not to accpet the final opinion of value as rule if they feel it is a bit off. Appraisals is not an exact science and I would help them dissect the comps and make sure there are no line adjustments more than 10% or that the net and gross adjustments don't exceed FNMA guidelines.  Most consumers and brokers just don't undertand the details of an appraisal and accept the opinion of value as law.

Posted by Jennifer Chiongbian, Real Estate Broker - NYC (Specializing in all types of Manhattan apts & townhouses) over 6 years ago

You are so right. . . thanks for sharing the post, so many people don't understand appraisals.

Posted by Joy Daniels (Joy Daniels Real Estate Group, Ltd.) over 6 years ago
Hi Jeff, Appraisers do a great job when they have a purchase and sale contract in hand. "YUP = its worth what these people paid" Not so good when there is no sale to guide them on price... As I have found when they appraise bank owned homes in order to establish a sales price Phil
Posted by Phil Leng, Phil Leng - Retired (Retired) over 6 years ago