Real Estate Appraisal: What It Is and How It Affects Your Home Sale or Buy

When you’re buying or selling a home, real estate appraisal, an official estimate of a property’s market value based on comparable sales, condition, and location. Also known as property valuation, it’s not just a formality—it’s the backbone of any mortgage and the fairest way to set a price that matches reality. Banks don’t lend money based on what a seller hopes for. They lend based on what a licensed appraiser, a certified professional trained to assess property value objectively says it’s worth. If the appraisal comes in low, the deal can stall. If it’s high, you might have room to negotiate. Either way, it’s not optional—it’s mandatory.

Real estate appraisal isn’t about curb appeal or new paint. It’s about hard data: what similar homes sold for nearby, how old the roof is, whether the basement leaks, if the neighborhood is growing or declining. An appraiser walks through your home, takes photos, notes upgrades, and compares it to at least three recent sales in the area. They don’t care if you love the purple bathroom. They care if a three-bedroom, two-bath house with a 10-year-old HVAC system sold for £320,000 two streets over. That’s the number that matters.

And it’s not just for buyers. Sellers use appraisals to set a realistic asking price. If you list your home £50,000 above appraisal value, it sits on the market. Buyers walk away. You lose time and money. Landlords use appraisals to adjust rent. Investors use them to calculate cash flow. Even in shared ownership, where you own a portion of the home, the full property’s appraisal determines how much you’ll pay to buy more shares later.

There’s no magic formula. No algorithm can replace a trained eye. That’s why two appraisers might give slightly different numbers—but they should never be wildly off. If they are, something’s wrong. Maybe the comps aren’t recent. Maybe the appraiser missed a major repair. That’s why you can challenge an appraisal if you have solid evidence.

Real estate appraisal doesn’t guarantee you’ll get your dream price. But it keeps the whole system from collapsing. It’s the check and balance between emotion and economics. Without it, homes would be priced like concert tickets—based on hype, not value.

Below, you’ll find real-world breakdowns of how appraisals affect everything from shared ownership deals in the UK to first-time buyers in North Carolina. You’ll see why a £700k house on a £100k salary might not be possible—not because of income, but because of appraisal. You’ll learn how lenders use appraisal reports to approve loans, why landlords avoid certain properties, and how staircasing in shared ownership hinges on that one number: the market value.