Title: Home Appraisals – How One Appraisal Almost Cost Our Client $200,000

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by Tanya Kerr and Russ Phillips

Tanya: Alright, let’s talk about appraisals. I know, it’s not the most glamorous topic in real estate, but I promise you—it’s where deals can make it or break it. I learned this lesson in a big way with one of my clients, and trust me, it’s a story you’ll want to hear. Imagine being $200,000 short on your dream home’s contract price because of a low appraisal—and to close the deal, you’d have to bring an extra $200,000 to the table. Sounds scary, right? Well, this happened, but with some grit, teamwork, and a bit of luck, we turned it around

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What Is a Home Appraisal and Why Does It Matter So Much?

Russ: So, first off, what’s a home appraisal? Think of it as a professional opinion on how much a home is worth at that exact moment. Lenders require them before they issue a mortgage because they don’t want to lend more than what a property is actually worth. Makes sense, right? It’s just a safeguard to keep everyone in check.

Tanya: But here’s the twist: not all appraisers know every area equally. You’d think appraisers would be experts everywhere, but it’s more like doctors or mechanics—they each have their specialty. Some know city neighborhoods like the back of their hand, while others know condos and townhomes, or rural properties. And that difference in expertise can mean everything when you’re buying a unique property.

Russ: Picture this: you’re looking at a home with custom finishes, maybe a lake view or a big backyard, and you’re willing to pay top dollar. You’re excited; you’re ready to move in and call it yours. But if the appraiser doesn’t understand what makes that home special—like the view, the upgrades, or the market demand—boom, they can lowball the appraisal. And just like that, the lender says, “Sorry, we can’t lend on that”

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The $200,000 Appraisal Shock

Tanya: My client had found the perfect place out in Burnet, Texas—a stunning home with rolling hills all around, TWO lake views, and a cozy spot just waiting to be called home. We had negotiated a great price, fair and square, and everything seemed on track. Then, the appraisal came back, and it was like a punch to the gut—$200,000 below the contract price! You read that right. And the reason? The lender had sent an appraiser from Austin who didn’t know the Burnet area at all. He used comps from miles away that didn’t come close to reflecting the unique value of that property—the lakes, the view, the charm.

Russ: This is where things got real. The client chose a big, national lender, you know, one of those “Big Box” lenders that promise great rates. And hey, I get it! Who doesn’t want the best rate they can get? But here’s what happened: that lender sent an appraiser from Austin. Now, Austin and Burnet might not seem that far apart on a map, but in real estate terms, they might as well be worlds away.

Tanya: Oh, this appraiser had no idea what he was walking into. He didn’t understand the local market, and he didn’t know the right comps to use (that’s realtor-speak for “comparable properties,” by the way). So, he ended up using comps that were miles away from our client’s property and totally missed the uniqueness of those lake views.

Russ: And the worst part? That appraisal came in a staggering $200,000 below the contract price. I mean, $200,000! My client was devastated. And the lender? They basically shrugged and said, “It is what it is.”

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How We Saved the Deal (and $200,000!)

Tanya: But I wasn’t about to take “it is what it is” as an answer. This is someone’s dream home! I teamed up with the listing agent, and we scrambled to gather our own data—comps that actually made sense, based on properties with similar views, in the same area, with similar features. We handed everything over to the appraiser.

Russ: And guess what? The appraiser ignored every single bit of it. He stuck to his original comps, which were way off. Now, you might think, “Well, that’s that, right?” Not a chance! I knew we needed a lender with access to an appraiser who understood Burnet and knew what they were doing. So we switched to a new lender, one that had a better understanding of this type of property and area.

Tanya: We couldn’t directly choose the appraiser, but the lender could make sure they picked someone who actually knew the area and had access to the right MLS (the system that tracks home sales). And just like that, with a little persistence, we got an appraiser who “got it.” This time, the appraisal came back higher than the contract price! Not only was the deal saved, but my client didn’t have to worry about overpaying.

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Why the Right Appraiser Matters (Big Time)

Russ: So, here’s the lesson: not all appraisers are created equal. And the lender you choose can make a huge difference in the kind of appraiser you end up with. If you’re buying a unique property, you need an appraiser who really understands the area and the market. Otherwise, you’re taking a gamble, and let me tell you, the stakes can be high.

Tanya: This is especially true in areas with unique homes. Lake views, custom builds, acreage—all those features make your property special. But they can also make it harder to appraise if the appraiser doesn’t have the right knowledge. And that’s why we always push to work with local lenders who know our area inside and out.

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What to Do If Your Appraisal Comes in Low

Russ: Now, let’s say you find yourself in this spot—a low appraisal. Don’t panic. It’s not the end of the world, and it doesn’t mean the deal’s dead. It just means it’s time to get creative.

1. Challenge the Appraisal

If there’s a major issue with the comps or if the appraiser clearly missed something, you can go back and challenge it. Gather your data and make your case.

2. Get a Second Opinion

Sometimes, just getting another appraiser with a better understanding of the area can make all the difference, just like it did with Tanya’s client.

3. Negotiate

if you’re the buyer, a low appraisal can actually be leverage to negotiate a lower price. But if you’re the seller, you’ll want to be prepared to defend the value.

Tanya: And remember, a good agent will be right there by your side, helping you fight for the right value. I’m not one to just sit back and let my clients take a loss. We’re talking about a major investment, and I’ll go to bat to make sure it’s fair.

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How to Make Sure Your Appraisal is Accurate

Russ: Here’s the real trick to getting an accurate appraisal—stay ahead of it. Sellers, if you’re listing a property that’s unique or in a high-demand area, work with an agent who knows how to “defend” that value when the appraiser comes around. And buyers, if you’re going with a big national lender, just be aware you might run into issues with appraisers who aren’t local experts.

1. Provide Helpful Info

Give the appraiser as much information as you can. Recent updates? Unique features? Give ‘em the details.

2. Work with a Local Lender

They’ll likely have better connections with appraisers who know the market, making it more likely you’ll get a fair value.

3. Ask Questions

If you’re not sure what’s happening with your appraisal, ask. Your agent should help you understand every step of the process.

Tanya: It’s all about working with people who know the ropes. If your team isn’t experienced, you’re leaving too much up to chance. And when you’re talking about $200,000? That’s a risk I’m not willing to take.

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Final Thoughts: Why Appraisals Are a Big Deal

Russ: So, what’s the takeaway? Appraisals are not just a box to check. They can make or break a deal, especially with unique properties or in a changing market. The right lender, the right appraiser, and a knowledgeable agent who’s ready to defend the value—that’s the winning combination.

Tanya: And if you’re ever in a spot where an appraisal comes in low, don’t lose hope! There are ways to challenge it and, in some cases, even turn things around. That’s what Russ and I are here for: to make sure you get a fair shake in every deal.

Russ: Exactly. Appraisals might seem like a small piece of the puzzle, but they’re a big part of what determines if you’re paying—or selling—for the right price. So, choose your team wisely. And if you’ve got questions, reach out to us. We’re here to help you navigate these twists and turns.

Tanya: At the end of the day, this is your investment, your home, your future. And we’re going to fight to make sure it’s valued the way it deserves to be.

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Looking for more real estate insights or ready to start your home buying journey? Connect with us at T. Kerr Property Group, where your home dreams are our mission.

Call us today at: (512) 851-8350