What Can Lower My Home Appraisal — And Can I Do Anything About It?

A quick primer: How appraisers typically value homes

Before diving into what can lower your home’s appraised value, let’s quickly review the most common way appraisers calculate the value and what appraisers generally look for.

Comparable sales or “market data” approach

The most common approach appraisers use to determine the value of your home is known as the comparable sales method. When using comparable sales, aka “comps,” the appraiser will identify recently sold homes in the area similar to yours and use them as a tool to help inform the value of your property.

Comps are most reliable when they closely match the age, size (square footage and the number of rooms), and location of your property. Additionally, a good comp will have the same amenities as your home, such as a pool or two-car garage.

If your agent prepared a comparative market analysis (CMA) for your home prior to pricing and listing it, then the appraiser’s comps selection shouldn’t be a major surprise. You’re likely both working off the same available data and sales history for your area.

If your property is primarily a rental or Airbnb, your appraiser may instead use the income approach to determine the value of your home. They may also turn to the cost approach to value new construction, or if your property is unique enough that there aren’t comps in the market to do it justice.

The cost approach considers the cost of rebuilding your property from scratch. The calculation factors in the cost of land and rebuilding on that property, and the depreciation of the existing structure.

Here, we’ll focus on the comps approach since it’s usually what you’ll see in the average real estate transaction or refinance situation.

Which factors can lower your home’s appraised value?

When it comes to factors that can lower your home’s appraisal, some are within your control, while others are influenced by outside forces like the market or economy.

1. Your home doesn’t appear to be in great shape

“If your home is filthy or doesn’t smell good, an appraiser doesn’t want to spend a lot of time in it — they might not even notice big-ticket, value-add items,” says Michelle Minik, a Phoenix-based real estate agent with 25 years of experience. You’ll also raise red flags with the appraiser if your home looks poorly maintained with wall dings and scratches, peeling paint, or beat-up floors.

What can you do about it?
Make it easy for an appraiser to focus on your home’s assets with this checklist:

• Clean the home as you would for house showings.
  Appraisers technically aren’t trained to dock you for cleanliness, but first impressions matter, and you want to show that you’ve cared for the home properly. Declutter your home: vacuum, dust shelves and cabinets, sweep and mop your floors, and wipe down countertops and surfaces. Pick up your kids’ toys and put away items cluttering up your floors and hallways. Make sure you don’t have any dirty dishes in the sink.
• Spruce up your curb appeal.
  Mow the lawn, pull up any weeds, edge your flower beds, and clean up the entryway. You can’t necessarily put a price on curb appeal through quantitative appraisal methods but appraisers do take it into account qualitatively when reconciling that final value.
• Address any light repairs and routine maintenance items.
  Check that all your home’s outlets work, replace any burned-out light bulbs, and hire a handyman to fix issues like broken door handles, holes in the drywall, or loose cabinet faces.
• Don’t invest in any big remodeling projects.
  Preparing your house for the appraisal should never involve last-minute renovations because you’ll rarely get back what you spend dollar for dollar. If you want to improve your home’s value long term you should plan projects well ahead of time. For the appraisal alone, focus on making the house look its best in its existing state, regardless of whether your bathroom or kitchen is outfitted with the latest trends.

2. You have a lot of basement-level square footage

No matter the quality of your finished basement, it’ll never be the same value as above-ground living for an appraiser. “Appraisers will take a baseline of say $100 a square foot for the above-grade space. And maybe the below-grade space is 70% or $70,” says Chuck Argianas, a professional appraiser with over 30 years of experience valuing homes.

What can you do about it?
You can’t move the location of your basement, but you can get an idea of how it’ll be appraised before it happens. If your basement has outside access, it might be appraised at a higher value.

The lower it is below-grade, the less the square footage will likely appraise for. You can also consult with your real estate agent to find out how the appraiser will evaluate the basement so at least you’re not surprised by the results.

3. Your appraiser included a bad apple in the comps pool

The comparable properties your appraiser selects will ultimately influence your home’s appraised value. Your appraiser will be skilled in selecting and reviewing comps, so most of the time, the sales data will be spot on.

However, let’s say that there are two identical homes in the same location, but the appraiser pulled the lower value of the two to appraise your home. It turns out one of them was a divorce sale. The owners were in a rush to sell to move on quickly, so it sold for less. In this case, you might have a case that would prompt an ethical appraiser to own up to the mistake and modify their report.

What can you do about it?
If you and your agent have already created a CMA to help price your home on the market, then you probably have a good idea of the comps in your area and can share what you know with the appraiser. While it’s not recommended for you personally to be on-site during your property’s appraisal, you can ask your agent to be there for assistance.

Naples-area agent John Krol makes it a point to attend his sellers’ appraisals to offer perspective on selected comps. “I just want to help the process any way I can to make sure it goes smoothly and the comp properties are reflected in the property’s value,” Krol says.

4. Market conditions are changing quickly

Sometimes, the real estate market changes faster than the available sales data. Ideally, appraisers will look at homes sold within the past 90 days, but in some cases, they may have to go back further than that. It’s also important in this case that the appraiser is geographically competent, i.e., familiar and in touch with the area and price trends on the neighborhood level.

What can you do about it?
This is another matter of comps integrity. You should confirm that the comps selected in the appraisal are as recent as possible, and reflect the final sales price of the property, not the listing price. Your real estate agent should be able to help you with this.

5. You have a unique property

Maybe your home has something most properties in your area don’t, like a spectacular view, specialty garage, or custom-built features. There could be a concern that the appraiser won’t know how to price these features, and could undervalue them, leading to a lower appraised value.

What can you do about it?
First things first, have a sanity check with your agent to confirm the feature is indeed a value add. “I’ve seen some koi ponds in my experience,” says Minik, “but in reality, they’re not a ton of added value. I don’t necessarily think everybody’s going to see a lot of value in that.”

However, if you’re selling a high-end property with lots of special amenities, and you’re worried about whether the home will appraise before closing, Minik recommends sellers obtain a pre-listing appraisal. This can dispel any anxieties you have about the value of your home and reduce the odds that the lender’s appraisal will come in under the contract price.

How to challenge a low appraisal

If your home’s appraisal comes in lower than expected, you may have options to dispute it. Here’s how you can push back effectively:

• Request a copy of the appraisal report: Review it carefully for errors in square footage, missing upgrades, or incorrect comps. Even small mistakes can impact the final value. If you find discrepancies, you can present evidence to request a correction.
• Provide better comparable sales: Sometimes, appraisers use outdated or less relevant comps. Research recent sales of similar homes in your area, ideally within the last three months. If you find stronger comps, submit them as part of a reconsideration request.
• Showcase missed home upgrades: If the appraiser didn’t account for certain improvements, provide proof such as receipts, permits, or contractor invoices. Emphasize major updates like a renovated bathroom, new HVAC system, or upgraded flooring. Highlighting these enhancements can help support a higher appraisal value.

Ready for the appraisal?

The appraisal process can be stressful, mysterious, and somewhat out of our hands as homeowners and sellers. But doing what you can to better prepare your home for the appraiser can remove some of the anxiety around the process. Knowing what to expect also may help you command the highest appraisal your home is capable of getting.

While some factors, like market trends, are beyond your control, addressing maintenance issues and improving your home’s overall condition can make a difference. Small upgrades, curb appeal, and a well-kept home can help you put your best foot forward.

If your appraisal comes in lower than expected, don’t panic. You have many options to challenge it or adjust your pricing strategy. To navigate the selling process with confidence and maximize your home’s value, consider partnering with a knowledgeable real estate agent who can provide expert guidance and market insights.

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