Overview
An appraisal is a formal, licensed valuation ordered by the buyer's lender, distinct from the comparative market analysis (CMA) your agent prepares. Condo appraisals lean heavily on recent sales within the same building, ideally the same line, since unit value can vary significantly by floor and exposure even within one property. Cleaning, minor repairs, and providing the appraiser with strong comparable sales data can all help support your value; if the appraisal still comes in low, you can renegotiate, challenge the report, or walk away.
What Is an Appraisal?
An appraisal is a professional evaluation of a property's value, typically ordered by the buyer's lender to confirm the property supports the loan amount before funding. The appraiser weighs location, size, condition, and recent comparable sales.
How Is an Appraisal Different from a CMA?
Both estimate a property's value, but differently. A CMA, prepared by your real estate agent, is based on recent comparable sales in the area. An appraisal is a more formal process conducted by a licensed appraiser, factoring in the property's condition and improvements more directly, and it's independent of your agent's input.
How Condo Appraisals Differ from Single-Family Appraisals
Condo appraisals lean on comparable sales within the same building, ideally the same line, since unit value can vary meaningfully within one property based on floor, exposure, and layout. Appraisers may also weigh special assessments or pending litigation affecting the building, which can influence the unit's value independent of its own condition.
Preparing Your Condo for an Appraisal
- Clean and declutter: a clean, uncluttered space helps the appraiser see and appreciate the unit's actual features.
- Make minor repairs: leaky faucets, burnt-out bulbs, and touch-up paint are quick fixes that support a stronger valuation.
- Highlight improvements: point out upgrades like new appliances, flooring, or fixtures the appraiser might otherwise miss.
- Provide comps: work with your agent to hand the appraiser comparable sales data for your building or neighborhood.
- Be present: not required, but being there lets you answer questions and highlight unique features directly.
Preparation and accurate information both help ensure your condo is presented in the best light during the appraisal.
What Is an Appraisal Gap?
An appraisal gap is the difference between the appraised value and the agreed purchase price. If the appraisal comes in below the contract price, the buyer may ask the seller to lower the price to match.
Example: a seller lists a Brickell condo for $600,000. The appraisal comes in at $550,000, a $50,000 gap. After negotiation, the buyer and seller split the difference and settle on $575,000.
What to Do If the Appraisal Comes in Low
You generally have three options: negotiate a new price with the buyer, challenge the appraisal if you believe it was done incorrectly, or walk away if you're unwilling to reduce the price.
Challenging an Appraisal
Challenging an appraisal is worth considering if you believe it contains errors, but success isn't guaranteed. Start by reviewing the report closely for mistakes or omissions, and consider getting a second opinion from another appraiser for comparison. From there, you can request a formal review or submit a rebuttal to the appraisal company or the lender who ordered it.
Work closely with your agent throughout this process. They can help you understand your options, prepare a rebuttal if warranted, and interpret the report itself. A successful challenge can lead to a revised, higher value, but the appraisal is still a professional evaluation and should be taken seriously even when disputed.
