What You Need to Know About Home Appraisals

Whether you’re purchasing your first home or moving up to your next one, the home appraisal is a crucial step that ensures the property you’re buying is worth the price you’ve agreed to pay.

For buyers throughout Utah County, including communities like Salem, Spanish Fork, and Payson, understanding how appraisals work can help you avoid surprises, navigate the loan process with confidence, and make better-informed decisions about your investment.

A home appraisal may seem like a behind-the-scenes formality, but it can significantly impact your financing, negotiations, and even your ability to close on a home. Below, we break down what appraisals are, why they matter, how they’re conducted, and what you can expect as a buyer working with Bybee + Co.

A home appraisal is a professional, unbiased estimate of a property’s market value. In most cases, it is required by your lender to ensure the home is worth the amount they are financing. Because mortgage lenders are taking on financial risk, they want confirmation that the loan aligns with the home’s current market value.

An appraiser is licensed, certified, and trained to evaluate homes objectively. They use data, on-site observations, and market analysis to determine the property’s value.

While similar to an inspection in the sense that both involve evaluating the home, the two serve very different purposes:

• A home inspection assesses condition and functionality
• An appraisal determines value

Both are essential, but the appraisal plays a direct role in financing and loan approval.

The appraisal affects nearly every part of the purchase process. Here’s why buyers should pay close attention to it.

The last thing you want is to purchase a home for more than it’s worth. The appraisal protects you by confirming that the agreed-upon price is fair.

Your lender uses the appraisal to determine how much they are willing to loan on the property. If the appraisal comes in lower than the purchase price, the lender will only finance up to the appraised amount.

Most loans cannot move forward without an appraisal. A delayed or contested appraisal may push back your closing date unless handled quickly and efficiently.

If the appraisal value differs significantly from the contract price, buyers and sellers may need to renegotiate. A knowledgeable agent is crucial in guiding you through these discussions.

Appraisers follow strict industry guidelines and use multiple factors to arrive at a valuation. While every home is unique, here are the primary methods used:

This is the most common method. The appraiser evaluates recent sales of comparable homes in the same area. These comps must be similar in size, condition, location, and features and typically must have sold within the last three to six months.

Because Salem and the surrounding Utah County communities can move quickly, recent comps offer a strong picture of market activity.

This method considers how much it would cost to rebuild the home at current construction prices, minus depreciation. This is more commonly used for new construction or unique properties.

Used primarily for investment properties, this method analyzes potential rental income and return on investment.

During the appraisal visit, the appraiser will assess:

• Overall condition of the home
• Square footage and layout
• Number of bedrooms and bathrooms
• Exterior and structural integrity
• Quality of finishes and upgrades
• Lot size and usability
• Neighborhood characteristics
• Energy efficiency features
• Recent renovations or improvements

After analyzing the home and local market conditions, the appraiser compiles a detailed report that outlines the final value.

The appraisal typically takes place after the inspection and right in the middle of your loan approval timeline. Here is what buyers can expect:

Your lender orders the appraisal, and the appraiser schedules a time to visit the property. Buyers do not select the appraiser; this ensures neutrality and compliance.

The appraiser walks through the home, takes photos, measures rooms, examines features, and notes any repairs or upgrades. This visit usually lasts from 20 minutes to an hour.

The appraiser compares the home to other recent sales, studies the local housing market, and applies the appropriate valuation methods.

Within several days, the lender receives a detailed report that includes comps, property sketches, notes on condition, and the final appraised value.

Your real estate agent will review the appraisal with you and help determine the next steps based on the results.

A low appraisal is one of the most stressful scenarios for buyers, but with experienced guidance, it can often be resolved. A low appraisal means the home is valued below the purchase price. In this case, the lender will only finance based on the lower value, potentially creating a gap.

Buyers typically have several options:

Your agent may work with the seller to reduce the price to match the appraised value. Many sellers agree to this if the appraisal is solid and well-supported.

Sometimes buyers and sellers meet in the middle, each covering part of the difference.

A buyer who strongly wants the home may choose to bring additional funds to closing. This is common in highly competitive markets.

In rare cases where the appraisal appears inaccurate or missing relevant comps, your agent and lender may dispute it or request a review.

If no agreement is reached, buyers may cancel the contract if they are still within their appraisal or financing contingencies.

The key to navigating a low appraisal is working with a team that understands local market dynamics and negotiation strategies, such as Bybee + Co.

Although buyers don’t control the appraisal, you can take steps to ensure the process moves smoothly:

• Stay in close communication with your lender
• Keep your agent updated on any new information
• Be prepared for possible negotiation
• Understand your loan program and contingency deadlines

Your real estate agent will guide you through these details and help you anticipate possible outcomes.

In communities around Salem, many buyers choose new construction. Even with a brand-new home, an appraisal is still required for financing. The appraiser verifies the property’s value based on:

• The builder’s plans and specs
• Lot size
• Comparable new builds in the area
• Current construction costs

If the appraisal comes in low, similar renegotiation options apply.

Having an experienced, detail-oriented real estate team is invaluable when it comes to appraisals. Bybee + Co supports buyers through:

• Reviewing comparable sales even before you make an offer
• Preparing strategic offers that reflect market realities
• Coordinating with lenders to track appraisal progress
• Helping you interpret the appraisal report
• Advising you on negotiation strategies if issues arise
• Ensuring timelines and contract terms remain protected

Their deep knowledge of Utah County’s market trends, pricing patterns, and neighborhood dynamics ensures you remain informed at every step.

The home appraisal is one of the most important stages in the buying process, influencing your financing, negotiations, and long-term investment. With the right preparation and expert guidance, it becomes a smooth and straightforward part of securing your new home.

If you’re preparing to buy a home in Salem or anywhere in Utah County, Bybee + Co is here to guide you every step of the way. Their commitment to transparency, communication, and client advocacy ensures you move forward with confidence.