Are you wondering how a home appraisal could impact your purchase or sale in Oakland County? You are not alone. Whether you are buying in Birmingham, selling in Troy or Farmington Hills, or refinancing anywhere in the county, the appraisal is a key step that can shape your timeline and terms. In this guide, you will learn what appraisers look for, when the appraisal happens, how value is determined, and what to do if the number comes in low. Let’s dive in.
What a home appraisal does
A home appraisal gives your lender an independent opinion of market value for the property being financed. It is not the same as a home inspection, and it is different from the county tax assessment. The lender uses the appraisal to decide how much it is willing to lend on the home.
In a financed purchase or refinance, the lender orders the appraisal after you sign the purchase agreement and start your loan application. The buyer typically pays the appraisal fee. Appraisers are licensed or certified in Michigan and follow professional standards known as USPAP.
When the appraisal happens
The appraisal is ordered once your loan moves into processing. It must be completed and delivered before your lender issues final approval and a clear to close. In many suburban markets like Oakland County, the appraisal process often takes several business days to a couple of weeks. Complex homes or busy seasons can add time. Because of this, appraisal delays are a common reason closing dates shift.
How appraisers determine value
Sales comparison approach
For most single-family homes, the sales comparison approach carries the most weight. The appraiser compares your property to recent, similar closed sales and adjusts for differences like square footage, condition, lot size, bedroom and bathroom count, and updates.
Cost and income approaches
The cost approach can be useful for newer homes or special-use properties by estimating the cost to rebuild, minus depreciation, plus land value. The income approach applies when value ties to rent, which can matter for two- to four-unit properties or investor purchases.
What appraisers review on site
Appraisers gather data to support their opinion of value. They typically review:
- Physical features: gross living area, bedroom and bathroom count, finished basement, garage, lot size, age, roof, HVAC, plumbing, and visible electrical condition.
- Condition and updates: kitchen and bath remodels, windows, flooring, structural issues, signs of deferred maintenance, and any water or pest damage.
- Functional utility: floor plan flow, number of baths relative to bedrooms, heating capacity, and accessibility features.
- Location context: street type, proximity to parks or commercial areas, road noise, view or topography, and broader neighborhood factors.
- Market data: recent closed sales, pending sales, active listings, days on market, and price trends.
Comparable sales and adjustments
Closed sales are the strongest indicators of value. The more recent and similar the sales, the better. If recent, close matches are scarce, appraisers may use older sales or make larger adjustments. That increases uncertainty and can lead to more lender scrutiny.
Oakland County factors that affect appraisals
Birmingham nuances
Birmingham’s historic housing, high-quality renovations, and demand for walkability can create tight price bands block to block. Small differences in location or school zone boundaries may influence buyer expectations and comparable selection.
Troy and Farmington Hills consistency
Across Troy and Farmington Hills, you often see well-documented sales of similar mid-century or newer suburban homes. This can provide solid, nearby comps that help support value. Seasonality still matters; winter closings can reduce the pool of recent sales.
Other local property types
Elsewhere in Oakland County, you may find older homes with unique features, large-lot properties, or lakefront settings. These can make comp selection harder and may extend the appraisal timeline, especially if the appraiser needs to search a wider area for truly comparable closed sales.
Program rules that may apply
Certain loan programs have specific appraisal and property requirements. FHA, VA, and USDA loans include minimum property standards, especially around health and safety. Appraisers must meet these program rules along with standard appraisal guidelines. If issues arise, the report may call out repairs that need to be addressed before closing.
What if the appraisal is low?
When an appraisal comes in below the contract price, the lender will only lend based on the appraised value. That creates a financing gap. You and the other party have options:
- Buyer covers the difference in cash, subject to lender approval.
- Seller reduces the price to the appraised value.
- Both sides split the difference or renegotiate other terms, such as credits.
- Request a Reconsideration of Value through the lender by submitting stronger comps, correcting factual errors, or adding documentation for upgrades and permits.
- Ask about a second appraisal or a review appraisal if allowed by the lender or loan program.
- If there is an appraisal contingency, the buyer may be able to cancel and recover earnest money per the contract.
If the appraisal meets or exceeds the price
If the appraised value equals or exceeds the contract price, your financing can move forward as expected once the rest of underwriting is complete. Buyers gain peace of mind and may benefit from improved loan-to-value ratios. Sellers see confirmation that pricing aligned with recent market data.
Seller checklist to prepare for appraisal
Arrive prepared to support your value. Gather and share:
- A written list of improvements with dates and permit records.
- Invoices for major upgrades like roof, HVAC, or kitchen and bath remodels.
- Recent comparable sales your agent used in pricing.
- Survey, deed, HOA documents, easement information, and any transferable warranties.
- Clear access to the basement, attic, and mechanicals. Address obvious safety items in advance.
Buyer tips before and during appraisal
Help keep your timeline on track with these steps:
- Confirm your lender has accurate property details when ordering the appraisal.
- Make the property easy to access. Ensure utilities are on and systems are reachable.
- Share factual documentation through your agent, such as a list of upgrades, permits, and relevant comps. Avoid pressuring the appraiser.
- Ask your lender how they handle appraisal disputes and whether a review or second appraisal is possible if needed.
Common misunderstandings to avoid
- An appraisal is not a home inspection. An inspection evaluates condition and safety; an appraisal evaluates market value.
- An appraisal is a snapshot in time. It is not a guarantee of future value.
- Tax-assessed value is not the same as market appraisal value and often lags behind current market conditions.
Keep your closing on track in Oakland County
A well-managed appraisal can keep your purchase or sale moving in Birmingham, Troy, Farmington Hills, and across Oakland County. Focus on accurate pricing, clear documentation, and open communication with your lender and agent. If the value misses the mark, you still have options to bridge the gap, contest errors, or adjust terms.
If you want a strategic plan for pricing, presentation, and appraisal readiness, connect with Kyle Matta to Request a Complimentary Home Valuation.
FAQs
What does a home appraisal do in Oakland County?
- It provides your lender an independent opinion of market value for the property, which informs how much the lender is willing to finance.
Who orders and pays for the appraisal on a purchase?
- The lender orders the appraisal after you sign a purchase agreement, and the buyer typically pays the fee.
How long do appraisals take around Birmingham and Troy?
- Expect several business days to a couple of weeks, depending on market demand, season, and property complexity.
What happens if the appraisal is lower than the price?
- You can add cash, renegotiate the price or credits, request a reconsideration of value, ask about a second appraisal, or use your appraisal contingency if applicable.
Do FHA or VA loans change the appraisal process?
- Yes. These programs include additional property standards and repair requirements focused on health and safety that appraisers must follow.
Does staging increase the appraised value?
- Appraisers consider overall condition and quality, but staging has less impact than documented updates, functional improvements, and strong comparable sales.
