I'm worried about a low appraisal? How does the appraiser even decide value?

How do appraisers decide home value?

You want to understand how appraisers determine home value and whether that could affect your purchase. Appraisers use a systematic approach to estimate what your home is worth in the current market. The appraiser visits the property to assess its condition, size, layout, and features like updated kitchens or bathrooms. They measure rooms, note any repairs needed, and document the home's overall state. The appraiser then researches recent sales of similar homes in the area, typically within the past six months and within a mile radius. These comparable sales—called "comps"—form the foundation of the valuation.

The appraiser adjusts the comp prices based on differences between those homes and yours. If your home has a newer roof than a comp, the appraiser adds value. If it needs major repairs that a comp didn't, they subtract value. Location factors like busy streets or backing up to parks also influence the final number. You can review the appraisal report when it's complete to see which comps the appraiser used and how they made adjustments. If the appraised value comes in lower than your purchase price, you have options like negotiating with the seller, paying the difference, or requesting a second opinion. Share any concerns about the appraisal with your lender and they can walk you through your specific situation.