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The Ultimate Guide to Home Appraisals in Texas

If you’re buying or selling a home in Texas, you’ll want to pay attention to the home’s appraisal value; it can mean the difference between a smooth sale or it falling through. Here we break down home appraisals in the lone star state.
The Ultimate Guide to Home Appraisals in Texas

A home appraisal is an estimate of your home's worth from an unbiased, licensed Texas appraiser. While a home inspection lays out any defects of a home, an appraisal tells a lender an estimated value of the home.

Home appraisal values in Texas can make or break the sale of a home. Understanding how they work and your options if they come in too low can help both buyers and sellers make sure the deal goes through.

When dealing with appraisals, working with an experienced, knowledgeable Texas real estate agent is key. They can walk homeowners and buyers through the process, ensure the home appraises for the appropriate amount, and provide workarounds if it doesn't.

> Reach out and get connected to a top agent in your area.

In the meantime, here's what you need to know about home appraisals in Texas.

What is a home appraisal?

A home appraisal is a professional opinion of what your home is worth. Appraisals are typically done at the request of a lender wanting to protect itself in the event of a foreclosure on the property. The bank wants to know what the home is worth in case the borrower defaults on their mortgage and the lender must sell the home to recoup its costs.

While a home inspection tells a buyer any needed repairs related to the home, an appraisal is focused on the home's value based on similar homes that have recently sold in the area.

The result of an appraisal determines how much the buyer can borrow and how much they'll need to come up with as a down payment. The seller wants to appraisal to come back as high as possible so the buyer will be approved for the loan and the sale of the house will go through.

Market Value vs. Appraised Value

Market value and appraised value may appear to measure the same thing — the value of the home. But, there are some key differences.

The market value is the amount potential buyers are willing to pay for a property. Market value is usually determined by a licensed real estate agent who uses active property listings, pending property sales, sold properties in the last 12 months and expired listings.

This is likely the value a seller uses to determine the home's listing price, but actual market value may be less than the listing price. The key to market value is that a home is only worth what someone is willing to pay.

An appraised value must be completed by an accredited, professional appraiser giving an unbiased opinion. The appraiser uses recent property sales in the neighborhood, the features and functionality of the home, the condition of the home, and other details to determine the appraised value. This the value the bank uses to determine its willingness to loan money to the buyer.

The market value and appraised value may differ. Generally speaking, appraised values are usually lower than market values.

For example, the median home value of homes (what it would appraise for) in Dallas, Texas is $213,200, but the median market value (or what homes have sold for) is $287,400 according to August 2019 data from Zillow.

Factors Impacting a Home Appraisal in Texas

Generally, anything that won't stay when you move shouldn't affect your home appraisal, so don't worry about scurrying around to tidy up. You'll want to save the deep clean for your open houses or marketing photos. But, below are a few easy ways to positively impact your home appraisal.

Repairs and Improvements

Inevitably you've made some repairs or improvements to your home over the years. Make a laundry list of all these items and their costs and make sure the appraiser is aware of them. While you won't get a dollar-to-dollar increase in your appraisal value, the list won't go unnoticed and can help to increase the appraised amount.

If you've missed some major items in your to-do list, consider making them prior to your appraisal. But make sure you're doing low-cost, high-impact repairs to get the most bang for your buck. Cleaning the carpets and patching any holes in the walls are a good start.

Visible Signs of Age and Deterioration

While older homes tend to draw lower appraisals, by making small upgrades to carpet, windows, or other permanent fixtures can make your home appear newer and boost its appraisal value.

Appraising isn't an exact science and most appraisers value a home in $500 increments. If there's something you think may bump your home's value up to that next level, but cost less than $500, talk with your local Texas agent about completing the repair. Things like new countertops or a fresh coat of paint on a particularly dingy wall can pack a big punch for a relatively low cost and hassle.

Curb Appeal

You want your home to be seen as the best one on the block. Trim back any overgrown trees or bushes so the appraisal reflects the amount of care and maintenance you've invested in your home. Newer windows and doors will, of course, increase your home's value, but you'll want to weigh the cost of the upgrade with the potential value increase.

The Neighborhood

Part of a home's appraisal value is determined by the neighborhood in which the house sits. If new roads or schools have recently been built in the area, make sure to note this to the appraiser.

Do a quick search to compare recent homes that have sold in your neighborhood that are similar to your own to get a good idea of its value.

The Home Appraisal Process in Texas

Here's a quick rundown of what you can expect during the appraisal process when buying or selling a home in Texas:

  • The lender requests a home appraisal from a licensed or certified residential appraiser.
  • The appraiser arrives and tours the home, making notes on its condition. This can take several hours.
  • On site, the appraiser evaluates the home value based on location, square footage, amenities, and condition.
  • The appraiser uses their evaluation to assign an appraisal value to the home and provides this to the lender — usually in two to seven days in Texas.
  • If the appraisal value is high enough and the lender is confident in the amount of the loan, they approve the borrower's financing for the agreed upon amount.
  • At closing, the borrower is responsible for paying for the appraisal cost.

How much does a home appraisal cost in Texas?

According to a 2019 Texas appraisal fee survey, the cost of a Texas home appraisal ranges between $300 to $450 on a typical single-family home. If the property is unusual, larger, or in a rural area, you can expect to pay a higher fee for appraisal services.

Who pays for the home appraisal in Texas?

Generally, the party that owns the loan is responsible for paying for the Texas home appraisal. If you are using a mortgage to buy a home, the cost of the appraisal is typically added to your closing costs.

What Texas Home Sellers Need to Know About Appraisals

How to Prepare for a Home Appraisal

Before an appraiser visits your home, get all your ducks in a row. Make a list of any major repairs or improvements you've made including things like a new roof, new carpet, an addition, and anything else that may add value. Plus, you'll want to make sure an appraiser can easily access key areas like a furnace room or utility closet.

How can I boost my home's appraised value?

Simple things like trimming up landscaping may have a minimal effect on your appraisal but all they cost are a bit of sweat equity. You may consider minor repairs in the range of $300 to $500 that could have a greater effect on your home's value. Now's the time to fix any holes in the walls or mitigate any leaky faucets.

How to Appeal a Low Appraisal

If you think the appraisal value of your home came in too low, you do have the option of appealing it and requesting that the appraiser take another look. Get a copy of the appraisal to verify the specifics of your home are correct and then do your own homework to find comps in the area.

If you are unsure of an appraiser's numbers, ask them how they come up with the values and if you disagree, argue your case with them. In the event they still won't modify the value, you can also approach the lender with your concerns and possibly request a different appraiser.

What Texas Home Buyers Needs to Know About Appraisals

Who appraises the home and how do I know they will do a good job?

In most situations in Texas, the buyer's lender will select the appraiser to do the assessment of the property. More than likely, they are qualified and licensed, but if you have doubts, you can always look them up on the National Registry of Appraisers to make sure their credentials are up-to-date.

While the lender finds the appraiser, they do not work on behalf of the lender — rather, they are impartial and unbiased.

What if the home appraisal comes in low?

Since a lender requests an appraisal to ensure it doesn't over-lend above the home's value, an appraisal that comes in lower than expected could mean the bank won't approve a buyer's loan — or at least in the amount requested.

The homeowner may appeal the low appraisal, but it's likely the buyer will either need to come up with more cash in the form of a down payment or renegotiate with the seller to a lower selling price.

If you have a great buyer's agent, you may also be able to renegotiate other parts of the agreement to make it a win-win while still having your loan approved.

> Start interviewing top buyer's agents in your area.

In a buyer's market, the buyer may be able to convince the seller to pay for more closing costs, allowing the buyer to use the saved funds to contribute more to the down payment while paying the same overall amount out-of-pocket. Be careful though — some mortgage lenders require that the borrower pay certain closing costs related to the mortgage.

Top Home Appraisal Companies by City

Houston

San Antonio

Dallas/Fort Worth

Austin

El Paso

Texas Home Appraisal Resources

Want to learn more about the home appraisal process in Texas? Fill out the form below to get connected with a top-rated, local real estate agent for free advice and answers to your questions about the home selling or buying process.

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Andrew Schmeerbauch
Andrew Schmeerbauch

Andrew Schmeerbauch is the Director of Marketing at Clever Real Estate, the free online service that connects you top agents to save on commission. His focus is educating home buyers and sellers on navigating the complex world of real estate with confidence and ease. Andrew has worked on projects for the United Nations and USC and has a particular passion for investing and finance. Andrew's writing has been featured in Mashvisor, L&T, Ideal REI, and Rentometer.

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