Common Misconceptions About Home Appraisals

Property value. What makes it go up? What makes it raise an eyebrow?

Perhaps most importantly, who gets to decide what the true market value of your home or property truly is?

Getting a reputable residential real estate appraisal is what can provide you with a completely objective perspective on how much your home or property is worth. However, while home appraisals are a crucial step in the process of buying or selling a home, they are often surrounded by many misconceptions and misunderstandings that create a cloud of mystery behind this vital process.

Many people view appraisals as stressful and mysterious, but understanding the truth behind common misconceptions can help alleviate anxiety and ensure a smoother experience.

Allow our experts to debunk many common myths about home appraisals and shed light on what appraisers look for. Ensure that you purchase or sell a home at exactly what it’s worth!

Debunking Myths About What Home Appraisers Look For

One common misconception about home appraisals is that appraisers only focus on the physical attributes of a property, such as square footage and the number of bedrooms. In reality, appraisers consider a wide range of factors when determining a home's value.

Factors that impact an appraisal include the condition of the property, recent sales of comparable homes in the area, the neighborhood's desirability, and any upgrades or renovations.

By understanding the holistic approach that appraisers take, homeowners can better prepare for the appraisal process and ensure that their property is accurately evaluated.

Does a Home's Decor Influence Its Appraisal Value?

Another misconception is that a home's decor significantly influences its appraisal value. While personal taste in decor may impact a buyer's perception of a property, appraisers focus on more objective criteria – like the property's overall condition, functionality, and structural integrity – rather than the style of furnishings or paint colors.

That being said, a well-maintained and aesthetically pleasing home may still command a higher market value, as it can appeal to a wider range of buyers.

Clarifying the Appraiser's Role in the Selling Process

Some homeowners mistakenly believe that the appraiser's primary role is to determine the selling price of the property. That only paints half the picture, as appraisers set out to provide an unbiased assessment of the home's market value based on objective criteria.

While an appraisal report may influence the listing price, it is ultimately up to the seller, buyer, and their respective agents to negotiate a final sale price.

Appraisers serve as neutral third parties whose role is to provide an independent valuation of the property.

Misconceptions About the Impact of Home Repairs on Appraisals

Homeowners often assume that making extensive repairs or renovations will automatically increase their home's appraisal value. While certain improvements may enhance a property's desirability and marketability, their impact on appraisal value can vary.

Appraisers consider the cost, quality, and relevance of any upgrades, as well as their contribution to the overall condition and functionality of the home.

Homeowners need to prioritize repairs that address structural issues or deferred maintenance, as these can have a more significant impact on appraisal value.

Here are a few other common misconceptions regarding home appraisals we’re happy to clean up!

Misconception 1: A Home’s Appraised Value = Market Value

Many homeowners (and buyers!) hear an appraisal number and assume it is the market value, and that’s not always the case.

An appraised value is a professional’s opinion of value based on detailed market data and comparable sales, while market value reflects what a willing buyer will actually pay for the home in today’s real market. Appraisal value influences market price, but it can’t predict exactly how much a buyer will offer. That all depends on buyer demand, neighborhood trends, motivation levels, and local conditions.

This explains why a home can sometimes sell above its appraisal (in a hot seller’s market) or below it when market conditions soften.

Misconception 2: Home Improvements Always Increase Appraisal Value

It’s a common belief that any improvement, from new granite countertops to an elaborate backyard overhaul, will boost your appraisal. The truth is that not all upgrades add measurable value in an appraisal report.

Appraisers look at functionality, overall condition, and comparable properties. If your renovation isn’t typical for your neighborhood, or if similar homes didn’t sell with those upgrades, the improvement might not add significant value.

For example:

Converting a garage to living space might not add much if it reduces essential features buyers expect in your area.
Highly personalized upgrades (like ultra-niche kitchen designs) may not influence value if they don’t translate into broader buyer appeal.

That’s not to say upgrades are never worth it (many do increase value), but you shouldn’t assume every project will raise the appraised value dollar-for-dollar.

Misconception 3: Home Appraisals Are Only for Sales & Purchases

Another misconception is that appraisals are only needed when buying or selling.

While that’s a common use, appraisals are valuable in many other situations too:

Refinancing Your Mortgage: Lenders still order an appraisal to determine how much equity you have.
Home Equity Loans or HELOCs: Lenders use appraisals to set loan amounts based on home value.
Estate Planning or Divorce Settlements: Appraisals provide an unbiased valuation for legal and financial purposes.
Property Tax Disputes: An up-to-date appraisal can help you challenge incorrect assessments.

Appraisals are more than just transaction tools. They’re strategic documents that give you a current, professional valuation of your property when you need it most.

Misconception 4: You Can Choose Your Own Home Appraiser

Some homeowners assume they can pick the appraiser who will evaluate their property, but in most mortgage transactions, the lender chooses the appraiser. This is done to ensure objectivity and compliance with federal standards.

That doesn’t mean you don’t have protections, as you always have the right to:

Ask for a reconsideration of value if you believe important facts were missed.
Provide additional comparables or evidence that support your perspective.
Request a second appraisal through your lender if needed.

But direct appraiser selection is generally not part of the process in a standard financing situation, and that’s intentional to protect fairness and impartiality.

The Truth About Home Appraisers & Selling Price Knowledge

Finally, there is a misconception that appraisers have access to insider information about recent selling prices in the area. While appraisers may review recent sales data as part of their valuation process, they do not have access to confidential information about specific sale prices.

Appraisers rely on publicly available data, such as property records and Multiple Listing Service (MLS) listings, to determine market trends and comparable sales. Their goal is to provide an objective assessment of the property's value based on the available evidence.

Twin Cities Home Appraisal Services You Can Trust

Understanding the truth behind common misconceptions about home appraisals is essential for homeowners looking to buy or sell a property. By debunking these myths, we hope more Minnesotans can approach the appraisal process with confidence and clarity.

If you’re looking for a reputable real estate appraiser near the Twin Cities for an objective home assessment, Lenders Appraisal Services is here to help! Contact us today to schedule an appointment with our experienced home appraiser team.