What is a home appraisal?
A home appraisal is an independent, professional opinion of a home's market value, prepared by a state-licensed or certified appraiser. When a buyer uses a mortgage, the lender orders the appraisal to confirm the home is worth at least what it's lending against. In Delaware and Maryland, the appraisal can change the loan amount, the buyer's cash to close, and sometimes the sale price itself, so it matters to both buyers and sellers.
This guide covers how appraisals work, how they affect a sale, what to do if one comes in low, and how to prepare. It includes our free Home Updates & Improvements Summary worksheet for sellers.
DOWNLOAD THE FREE SELLER WORKSHEET (PDF)
Who orders and pays for the appraisal?
The buyer's lender orders the appraisal, usually through an appraisal management company, so the appraiser stays independent of the buyer, the seller, and both agents. In Delaware and Maryland, the buyer typically pays the appraisal fee, often upfront or at closing. Cash buyers can skip the appraisal or order one on their own.
Nobody involved in the sale is allowed to pressure the appraiser toward a number. Buyers, sellers, and agents can share accurate facts, but the value is the appraiser's call.
Appraisal vs. home inspection vs. market analysis
Appraisal: estimates market value for the lender. The appraiser notes condition and visible defects, but doesn't test systems.
Home inspection: a detailed look at the home's condition and systems for the buyer. It doesn't estimate value.
Comparative market analysis (CMA): your agent's pricing analysis before listing or making an offer. It guides price, but it isn't an appraisal.
Online estimates (Zestimate and others): automated guesses from public data. Lenders don't rely on them.
How does an appraiser determine value?
For most homes, appraisers use the sales comparison approach. They find recent sales of similar homes nearby, called comparables or comps, and adjust each one for differences from your home: size, bedrooms and baths, lot, condition, updates, garage, basement, and amenities. The adjusted comps point to a value range, and the appraiser reconciles them into one opinion of value.
Appraisers also rate the home's quality (Q1 to Q6) and condition (C1 to C6), where 1 is the highest. Kitchen and bathroom updates, roof age, and visible defects all feed into those ratings. For some properties, the appraiser may also consider a cost approach (what it would cost to rebuild) or an income approach (for rentals).
What happens during the appraisal visit?
The appraiser measures the home, inside and out, and sketches the floor plan.
They photograph the exterior, street, kitchen, bathrooms, main rooms, basement, and any defects.
They note updates, condition, and features such as finished basements, decks, garages, solar panels, and accessory units.
They may need access to the attic, crawl space, basement, garage, and outbuildings.
Plan for the visit to take longer than you might expect, especially for larger homes.
How the appraisal affects the sale for sellers
A low appraisal can reopen negotiations. The buyer's lender will only lend against the appraised value, so you may be asked to lower the price or meet in the middle.
It can delay or end a deal. If the buyer has an appraisal contingency and the gap can't be bridged, the buyer may be able to cancel.
Repairs can be required. If the appraiser flags defects, the appraisal may be made "subject to repair," which can hold up closing. FHA and VA appraisals also check minimum property requirements, such as peeling paint, safety issues, or a failing roof.
Your pricing strategy matters. A price supported by recent comps is far less likely to run into appraisal trouble. See what it costs to sell a house in Delaware to see how price affects your net.
How the appraisal affects the sale for buyers
Your loan is based on the lower of price or appraised value. If a $400,000 home appraises at $390,000, the lender lends against $390,000, and the $10,000 difference comes out of your pocket unless the price changes.
Your down payment and mortgage insurance can change. A low appraisal can raise your loan-to-value ratio, which can affect mortgage insurance and loan terms.
Your contract terms matter. An appraisal contingency can protect your deposit if the home appraises low. An appraisal gap clause, where you agree to cover some or all of a shortfall, can make an offer stronger but adds risk. Talk through both with your agent and lender before you write an offer.
FHA and VA loans have added steps. The appraiser also checks that the home meets program property standards, and required repairs must be handled before closing.
What happens if the appraisal comes in low?
A low appraisal doesn't automatically kill a deal. The common paths are:
The seller lowers the price to the appraised value.
The buyer covers the gap in cash.
Buyer and seller split the difference.
The buyer requests a reconsideration of value (ROV) through the lender. Lenders on Fannie Mae, Freddie Mac, and FHA loans must have a process for this. The request can point out factual errors and suggest up to five alternative comparable sales.
The buyer cancels, if the contract's appraisal contingency allows it.
On VA loans, the Tidewater process gives the agents and lender a chance, typically two business days, to send the appraiser additional sales data before a below-price value is finalized.
For a full walkthrough, read what happens when a Delaware appraisal comes in low.
What if the appraisal comes in high?
The price doesn't go up. The buyer pays the contract price and starts with extra equity on paper. For the seller, nothing changes.
The new appraisal report (UAD 3.6)
Starting November 2, 2026, appraisals for conventional loans sold to Fannie Mae and Freddie Mac use a redesigned Uniform Residential Appraisal Report built on the UAD 3.6 data standard. It replaces the old 1004, 1073, and other legacy forms with one data-driven report. Lenders with a one-time exception could use the old format through May 19, 2027. FHA and VA are on their own timelines.
What it means for you:
Updates are recorded with time frames. "Kitchen remodeled 2024" carries more weight than "beautifully renovated."
Interior and exterior condition can be rated separately.
Visible defects go in their own table, with notes on whether they affect soundness and what repair is recommended.
Basements are reported separately. Finished below-grade space isn't added to above-grade square footage, and it's usually valued differently.
Measurements follow ANSI Z765-2021. Finished area generally needs a 7-foot ceiling, and under a sloped ceiling only space at least 5 feet high counts. If any part of a level is below grade, that whole level counts as below grade, including walkouts.
Read more: New Appraisal Rules for Delaware Sellers Start Nov. 2.
Home appraisal checklist for sellers
Fill out the Home Updates & Improvements Summary. List each update with the month and year, approximate cost, who did the work, and whether a permit was pulled.
Leave copies of documentation: invoices, permits, warranties, and before-and-after photos. Black out account numbers.
Fix small visible defects before the visit: peeling paint, drips, loose railings, missing smoke detectors.
Clear access to the attic, crawl space, basement, garage, and outbuildings.
Gather paperwork for energy features, including solar ownership or lease documents and any HERS score.
Share facts only. Don't suggest a value.
What's in the free worksheet
Sections for major systems, exterior, kitchen, each bathroom, interior, basement and below-grade space, energy features, and additions and outbuildings. Each item has room for the date, cost, contractor, permit, and whether documentation is attached, plus a checklist of what you're leaving for the appraiser. Fill it in on screen or print it.
DOWNLOAD THE FREE SELLER WORKSHEET (PDF)
Home appraisal tips for buyers
Ask your lender how they handle appraisals, timing, and a reconsideration of value before you need it.
Understand your contract's appraisal terms before you sign, including any contingency deadlines.
Plan for a possible gap. Know how much cash, if any, you'd be comfortable adding if the appraisal comes in short.
Read the appraisal when you get it. Check the square footage, bedroom and bath count, and features for factual errors.
Frequently asked questions
What is a home appraisal?
A home appraisal is an independent opinion of a home's market value prepared by a licensed or certified appraiser, usually ordered by the buyer's lender to confirm the home supports the loan amount.
Who pays for the appraisal in Delaware?
The buyer typically pays the appraisal fee in Delaware and Maryland, although the lender orders it. Who pays can be negotiated in the contract.
How long does a home appraisal take?
The on-site visit often takes an hour or more depending on the home's size, and the written report usually follows within several days. Timing varies with the market and the appraiser's workload.
What happens if the appraisal is lower than the sale price?
The buyer and seller can renegotiate the price, the buyer can cover the difference in cash, they can split it, or the buyer can ask the lender for a reconsideration of value. If the contract has an appraisal contingency, the buyer may be able to cancel.
Can a seller talk to the appraiser?
A seller can provide factual information, such as a dated list of updates and documentation, and answer questions about the property. Sellers and agents can't suggest or pressure the appraiser toward a value.
Does a finished basement count in square footage?
Not in above-grade square footage. Finished basement space is reported separately as below-grade finished area and is typically valued differently from above-grade living space.
Is an appraisal the same as a home inspection?
No. An appraisal estimates value for the lender. A home inspection evaluates the home's condition and systems for the buyer and doesn't estimate value.
What should I leave for the appraiser when selling my house?
A dated list of updates with approximate costs, contractors, and permits, plus copies of invoices, warranties, and any solar or energy paperwork. Our free Home Updates & Improvements Summary organizes it all on one form.
Buying or selling in Delaware or Maryland?
We help sellers price to the comps and prepare for the appraisal before they list, and we help buyers write offers that account for appraisal risk. If you're thinking about selling, start with your free Home Equity Report at search.teamsordelet.com/seller. Buyers and sellers can call Team Sordelet at (302) 613-4228. We serve Newark, Wilmington, Middletown, Bear, Dover, and the rest of New Castle, Kent, and Sussex Counties, plus Cecil and Kent Counties in Maryland.
Sources
McKissock: GSEs Announce UAD 3.6 Deadline Exception for Certain Lenders
Consumer Finance Monitor: HUD, Fannie Mae and Freddie Mac Issue Reconsideration of Value Guidance
David Sordelet, Designated Broker, Team Sordelet of Real Broker, LLC. License RB-0031238-DE / 5013138-MD. This page is general information, not legal or lending advice. Review your contract with your agent and attorney, and loan questions with your lender.
