Understanding Home Appraisals:

Understanding Home Appraisals: A Key Step in Your Homeownership Journey

Whether you're buying, selling, or refinancing a home, a crucial step in the process is obtaining a home appraisal. An appraisal provides an unbiased estimate of a property's market value, ensuring all parties—buyers, sellers, and lenders—have a clear understanding of the home’s worth.

What Is a Home Appraisal?

A home appraisal is conducted by a licensed professional who evaluates the property’s condition, location, size, features, and comparable recent sales in the area (known as “comps”). This helps determine the home’s fair market value, which is especially important when a lender is involved in the transaction.

Why Are Appraisals Important?

For Buyers: Ensures you don’t overpay for the property.

For Sellers: Helps set a competitive and realistic listing price.

For Refinancing: Establishes if you have enough equity to qualify for better loan terms.

What Happens If the Appraisal Comes In Low?

If you're buying a home and the appraisal comes in lower than your offer price, it can affect your ability to secure financing. But don’t panic — you have options:

Renegotiate the Purchase Price: The seller may agree to lower the price to match the appraised value.

Make Up the Difference in Cash: You can choose to pay the gap out-of-pocket if it aligns with your budget and long-term plans.

Challenge the Appraisal: With the help of your real estate agent, you can review the appraisal for errors or missing comparables and request a reconsideration.

Walk Away: If your contract includes an appraisal contingency, you may be able to cancel the contract without penalty.

Your Employee Homeownership Program can guide you through this process to make the decision that best fits your goals.

How Much Should You Offer on a Home?

Most buyers aren’t sure how much to offer on a property — and that’s completely normal. The right offer price isn’t just about what the seller is asking. It’s about what the home is actually worth.

That’s where comparable sales (comps) come in. These are recently sold homes in the same area with similar features (like size, number of bedrooms, and condition). Reviewing comps helps you and your agent determine a realistic, competitive offer price based on actual market data — not guesswork.

The Role of Your Real Estate Agent

A knowledgeable real estate agent plays a critical role in guiding your offer strategy. They:

Analyze comps to help you write a smart offer

Advise you on when to go strong or when to negotiate

Help protect your interests in the contract

Assist you in responding to a low appraisal

Communicate with the seller’s agent to position you competitively

The average agent in the U.S. only handles a few transactions a year — but the agents approved through your Employee Homeownership Program are vetted for experience, skill, and proven results. They understand the appraisal process and how to navigate challenging situations to protect your financial interests.

How Your Homeownership Program Supports You

Through your Employee Homeownership Program, you have access to:

Trusted, high-performing real estate agents

One-on-one coaching from your Homeownership Advisors

Help preparing for appraisals and making smart offers

Support if your appraisal comes in low

Educational tools to build confidence at every step

Reduced mortgage and real estate costs*

Buying a home is one of the biggest financial decisions you’ll ever make — and it shouldn’t be done alone. Take advantage of the expert support available to you through your benefits.