Costantini Team | Bay Area, CA Real Estate Experts

By The Costantini Team

If there is one part of the real estate transaction that consistently generates the most questions from our clients, it is the home appraisal. Buyers want to know if the home they are purchasing is worth what they agreed to pay. Sellers want to know if their pricing will hold up under scrutiny. And everyone wants to know what happens if the numbers do not align.

At The Costantini Team, we have guided clients through hundreds of transactions across Redwood City and the broader San Francisco Peninsula, and we have seen appraisals go smoothly, come in low, and everything in between. What we have learned is that the clients who feel most confident during this process are the ones who understand it before it begins. This guide is designed to give you exactly that foundation.

What a Home Appraisal Actually Is

A home appraisal is an independent, professional assessment of a property's fair market value conducted by a licensed appraiser. It is not the same as a home inspection, which evaluates the physical condition of the property. An appraisal is specifically focused on value, and it is ordered by the lender, not the buyer or seller, to protect the lender's financial interest in the transaction.

When a buyer finances a home purchase, the lender is taking on significant risk. They need to know that the collateral securing the loan, meaning the home itself, is worth at least as much as the amount being borrowed. The appraisal is the mechanism through which lenders satisfy that requirement.

In a market like Redwood City, where home prices reflect significant demand, premium locations, and a range of property types from historic Craftsmen to contemporary new construction, the appraisal process carries real weight. Understanding it is not optional for serious buyers and sellers. It is essential.

Who Orders the Appraisal and Who Pays for It

In most conventional purchase transactions, the buyer's lender orders the appraisal after the purchase contract has been executed and the buyer has submitted a loan application. The appraisal is typically paid for by the buyer as part of their closing costs, and the fee generally ranges from several hundred to over a thousand dollars depending on the complexity of the property and the scope of the appraisal.

The lender selects the appraiser through an Appraisal Management Company, commonly referred to as an AMC, which exists to ensure independence between the lending institution and the person conducting the valuation. Neither the buyer nor the seller selects the appraiser, and neither party should attempt to influence the appraiser's conclusions. The independence of the process is both a legal requirement and a practical protection for everyone involved.

What the Appraiser Evaluates

When the appraiser visits the property, they are gathering data across several categories that together inform their opinion of value. The Costantini Team prepares our clients on both sides of a transaction for this visit, and here is what the appraiser is looking at.

The appraiser evaluates the physical characteristics of the home, including square footage, number of bedrooms and bathrooms, lot size, age of construction, condition of the property, and the quality of finishes and systems throughout. They will note recent updates such as a remodeled kitchen, new roof, or updated HVAC system, as these improvements can support value conclusions.

The appraiser also examines the neighborhood and its immediate surroundings, including proximity to amenities, school district quality, traffic patterns, and any environmental factors that could affect marketability.

In Redwood City, neighborhood distinctions matter significantly. A home in Emerald Hills carries different market dynamics than a home in the Woodside Plaza area, and a skilled appraiser accounts for those distinctions.

Finally, and perhaps most critically, the appraiser selects comparable sales, commonly called comps, from recent transactions in the area. These are homes similar in size, condition, location, and features that have sold within a defined recent period. The appraiser adjusts their analysis based on differences between the subject property and each comparable, arriving at a supported opinion of value.

The Appraisal Timeline

After the lender orders the appraisal, the appraiser typically schedules an on-site inspection within several business days. The physical inspection of the property itself often takes between thirty minutes and two hours depending on the size and complexity of the home.

After the inspection, the appraiser spends additional time researching comparable sales, completing their analysis, and writing the formal report. In most standard transactions, the completed appraisal report is delivered to the lender within a week to ten business days of the inspection, though timelines can vary based on market activity and appraiser workload.

Once the lender receives the appraisal report, they review it for compliance with their underwriting standards. The buyer is entitled to receive a copy of the appraisal and should review it carefully with their agent and lender.

What Happens When the Appraisal Comes In Low

This is the scenario that generates the most anxiety among our clients, and it is worth addressing directly. When an appraisal comes in below the agreed purchase price, several paths forward exist, and none of them automatically end the transaction.

The buyer and seller can renegotiate the purchase price to align with the appraised value. The buyer can make up the difference between the appraised value and the purchase price in cash, which is sometimes called covering the gap. The buyer can formally dispute the appraisal by providing the lender with additional comparable sales or factual corrections, a process known as a reconsideration of value.

Or, in some cases, the transaction does not proceed and the buyer exercises their appraisal contingency to exit the contract.

At The Costantini Team, we prepare our sellers before listing by conducting our own thorough comparative market analysis so that pricing is well-supported from the outset. And we prepare our buyers to understand their options before an appraisal is ever ordered. Preparation is the most effective tool available on both sides of this equation.

How to Support a Strong Appraisal as a Seller

There are concrete steps sellers can take to give their home the best possible foundation going into an appraisal. We recommend that the property be clean, well-presented, and fully accessible on the day of the appraiser's visit. All recent improvements should be documented and provided to the appraiser in written form, including permit records where available.

If your home has features that add value but may not be immediately visible, a brief written summary provided to the appraiser at the time of the inspection can be genuinely helpful. Appraisers appreciate accurate, organized information, and providing it demonstrates that the seller and their representation are engaged and prepared.

Frequently Asked Questions

Can the seller be present during the appraisal?

Yes, and in many cases it is beneficial for the listing agent to be present to answer questions and provide supporting documentation. The Costantini Team routinely attends appraisals on behalf of our seller clients.

What if I disagree with the appraised value?

Buyers have the right to request a reconsideration of value through their lender. This involves submitting additional comparable sales or factual corrections to the appraiser for review. The Costantini Team assists our clients in building strong reconsideration packages when warranted.

Does the appraisal expire?

Most conventional appraisals are considered valid for 120 days, though lenders may have their own requirements. If a transaction is delayed significantly, a new appraisal may be required.

Is an appraisal required for all home purchases in Redwood City?

Appraisals are required for financed purchases by virtually all conventional and government-backed lenders. All-cash purchases do not require an appraisal, though buyers in cash transactions may choose to order one independently for their own protection.

How does Redwood City's competitive market affect appraisals?

In high-demand markets like Redwood City, purchase prices sometimes reflect competitive bidding that outpaces recent comparable sales. This is one of the most common causes of low appraisals in our market, and it is something The Costantini Team proactively addresses with our clients on both sides of a transaction.

When you are ready to buy or sell in Redwood City with a team that will guide you through every step of the process including the appraisal, we are here.

Visit The Costantini Team to connect with us and experience the difference that informed, experienced representation makes.