How can you boost your home’s market value? How can you boost your home’s appraised value?When we talk about a home’s valuation, we sometimes talk as if there is one agreed-upon number at which we can arrive. However, the final sale price can be impacted both by a home’s tangible properties – square footage, fixtures and finishes – and intangible properties like location and the state of the market. In some cases, the market will assign a higher or lower value to your property than a more objective evaluator will assign. This is the difference in home appraisal vs market value.

When you’re selling your home, you need to ensure both a supportable appraised value and a solid market value. While appealing to the market is essential for securing the highest possible sale price, you also need to secure a similar appraised value to ensure that the price you negotiate is the price you receive at the closing table.

Is appraised value higher than market value?

Not always. The appraised value is determined by a third-party appraiser who evaluates your home based on factors like size, location, and recent sales of comparable properties. Market value, on the other hand, can be influenced by factors like current demand, local economy, or buyer preferences, which may not impact the appraised value.

For example, a buyer may be willing to pay more for a home because of its location or unique features that appeal to them personally—like proximity to work or a preferred view—but these factors won’t affect the appraised value.

Do houses usually appraise for more than the selling price?

Appraisals are often close to market value, but they can lag behind in fast-moving markets. For instance, in 2020 and 2021, high demand and low inventory caused appraised values to fall behind actual sale prices. In stable markets, appraised values typically align with selling prices.

If you’re selling, your real estate agent will provide a Comparative Market Analysis (CMA), which looks at similar sales and current listings to estimate your home’s value. If you're unsure about your home’s appraised value, consider a pre-listing appraisal to set accurate expectations and protect yourself if a buyer’s appraisal comes in lower than expected.

What do you do if the appraisal comes in lower than the agreed-upon sale price?

If the appraised value comes in lower than the sale price you’ve negotiated with your buyers, you have a number of options. Any of the following can occur:

• You or the buyers may be able to appeal the appraisal if you can show that an error was made in the appraisal report or that there are elements that the appraiser missed. Corrected information, more appropriate comps, or information about recent improvements may make a difference in the appraiser’s valuation.
• If there is an appraisal or financing contingency in place, the buyers may ask you to renegotiate the sale price based on the appraised value. It is up to you to decide whether you want to do that or whether you want to try to find a new buyer. However, that new buyer’s appraisal will likely be similar to the current one unless there were significant errors in the report.
• If the buyers are motivated, they may be comfortable adding cash to the transaction to make up the difference between the appraised value and the sale price. This will allow the bank to approve financing for a lower amount and keep the transaction moving forward.

Ultimately, when you’re selling your home you need a real estate professional who can help you navigate the unexpected. That’s why it’s important to discuss your financial goals for the transaction and understand all of the options available to you at every step of the process.

How can you boost your home’s appraised value?

One of the most important things you can do to ensure that your home appraises properly is to make sure it is well-maintained. In some cases, the appraiser may not even come into the home and may make his or her decision based on a combination of an external inspection and publicly available information, including the MLS listing. Thus, curb appeal will have a major impact, as will the marketing of the property, including photography, video tours, and other materials.

If your property has been updated or upgraded significantly, make sure that the appraiser is aware of it. In addition, if the comparable properties the appraiser used to determine value are not true comps – either because they are significantly different from your home or because the location is not truly comparable – it’s important to point it out.

How can you boost your home’s market value?

By working with an experienced real estate agent, you can identify the increase property value and secure a top- and improve the way your home is perceived by the market. These include:

• Home improvements and upgrades
• Kitchen and bathroom remodels
• Additional square footage
• Changes to landscaping and curb appeal
• Smart-home updates
• Home staging 
• Professional marketing strategies and materials

Remember, the better your home looks both online and in-person, the more likely you are to increase property value and secure a top-dollar offer. 

Be careful, however, that you don’t over-improve your property. This can occur if you add updates that are out of keeping with other comparable homes in your area or if you add an addition that increases the square footage beyond the norms for your area. In these cases, it can be difficult to recoup the costs associated with the upgrades in the sale price.

Pricing your home properly and optimizing it for the market are key to the kind of seamless sale you’re looking for. It starts with the right real estate agent – and there’s no better place to find a trusted agent than Newzip. Our agent finder connects you with the right real estate professional in your market so that you can begin your home sale process. What’s more, our service is free, your satisfaction is guaranteed, and you even get cash back after you close.