Appraisal Explained: Understanding Property Value

What is an Appraisal?

An appraisal is a professional, unbiased estimate of a property’s market value, completed by a licensed or certified real estate appraiser. It is typically required by lenders during a mortgage transaction to ensure the home’s value supports the loan amount being requested.

Appraisals are based on a variety of factors, including recent comparable sales, property condition, location, and market trends. In Massachusetts, appraisers must follow strict guidelines and are held to high professional standards.

🔑Key Components of an Appraisal

A home appraisal isn’t just about square footage—it’s a detailed process that helps establish a property's true worth. Here’s what goes into it:

1. Property Inspection

The appraiser visits the property to assess condition, layout, size, and any unique features or upgrades. They’ll note everything from the roof and foundation to interior finishes.

2. Comparable Sales ("Comps")

Appraisers use similar homes sold recently in the area (typically within the last 6–12 months) to benchmark value. Massachusetts’ varied neighborhoods mean even small location differences can matter.

3. Market Conditions

The appraiser considers current local market trends—like inventory levels and buyer demand—which can impact value up or down.

4. Final Valuation Report

After gathering data, the appraiser delivers a written report with the home’s estimated market value. Lenders use this report to determine how much they’re willing to lend.

💡 Why Appraisals Matter

For buyers and lenders, the appraisal confirms that a property’s value aligns with the purchase price and loan amount. If the appraisal comes in low, it can lead to renegotiations, larger down payments, or even a canceled deal.

For sellers, a strong appraisal helps support the asking price and ensures a smoother closing process. In Massachusetts—especially in competitive areas like Metro West or North of Boston—accurate appraisals help keep deals on track.