The 5 Most Common Reasons a Home Appraisal Comes In Low — and What You Can Do About It
Few things are more frustrating for homebuyers and sellers than a low home appraisal. In today’s competitive Chicago housing market, even a small gap between the appraised value and the agreed-upon purchase price can put a deal at risk. Understanding why home appraisals sometimes come in low can help you prepare—and even prevent surprises.
1. Market Shifts or Rapid Appreciation
If nearby home prices have risen faster than comparable sales data can catch up, your appraisal may not reflect those recent increases. Staying aware of current market trends from trusted sources like Redfin’s Chicago Market Tracker and Illinois REALTORS® Market Stats can help you anticipate changes.
2. Inaccurate or Limited Comparable Sales
Appraisers rely heavily on recent, similar property sales. When comparable homes are scarce—especially in unique neighborhoods or rural areas—the valuation can be conservative. The Federal Housing Finance Agency (FHFA) provides insights into how comps affect appraised values.
3. Over-Improvement
Upgrades that are too specific or high-end for your area (like luxury finishes in a modest neighborhood) often don’t deliver dollar-for-dollar returns in an appraisal. The National Association of REALTORS® Remodeling Impact Report shows which renovations tend to offer the best value.
4. Deferred Maintenance
Visible issues like peeling paint, roof wear, or outdated systems can lower a home’s value. Regular upkeep goes a long way toward supporting a higher appraisal. The U.S. Department of Housing and Urban Development (HUD) provides resources on home condition standards that impact valuations.
5. Appraiser Familiarity with the Market
Not all appraisers have deep local insight. Working with a firm that uses real appraisers who know Chicagoland neighborhoods—like Real Valuation Services—can make a difference.
What You Can Do:
Before your appraisal, tidy up, document upgrades, and share a list of comparable sales with your appraiser. If your appraisal still comes in low, you can request a reconsideration or supply additional data.
For a reliable valuation by experienced local professionals, contact Real Valuation Services today.
