How Much Above Appraisal Should You List Your House: Give Yourself Some Space for Negotiation

Whether you’ve just started the process of looking for a real estate agent to help sell your home in Seattle, WA, or you’re just a curious buyer, it can be a good idea to know how much above appraisal you should list your house for.

For a property in an in-demand neighborhood with new upgrades, you could list and sell your house for 1%-3% above appraisal. However, this isn’t a cut-and-dry rule. Pricing your property above appraisal requires some careful thought and could lead to complications if your buyer is taking out a loan, all of which  will be explored in this Redfin article.

In this article:
What is an appraisal?
Should I get a pre-appraisal?
Keeping the terms straight
How to increase appraised value?
How to sell a home for more than the appraised value?
The bottom line: listing above appraisal

What is an appraisal?

An appraisal is a determination of the fair market value of a home. It’s often ordered by the buyer’s lender if they are financing the purchase. Appraisals are used by the lender to determine if the asking price is fair for the property and if they are willing to take on the risk of loaning the money to the buyer. The seller can also benefit from the appraisal, so they can know whether they are also getting a good deal or not. 

A home appraisal takes into account the entire picture of your property, from comparable homes and their sale prices to any special features your home has. Here’s what can influence your appraisal:

• Comparable homes nearby and their selling price
• Local market conditions
• Location and size of the home
• Lot size
• Lot topography
• Home age and condition
• Upgrades and improvements to the home
• Home appliances 

In a nutshell: An appraisal is a determination of the fair market value of your home. Many factors can influence the appraisal amount, including comparable home selling prices, home appliances, and local market conditions. 

Should I get a pre-appraisal?

Getting a pre-appraisal is a good idea if you’ve done a significant amount of home upgrades that will drive up your home value. For example, if you’ve just added some value with new home features like stainless steel appliances, a renovated backyard, or granite countertops, your home could be worth more than it was previously appraised for. Another reason to get a pre-appraisal is if there are no comparable listings, also known as “comps”, or if you’re selling the property on your own without a real estate agent.

The condition of the market can also affect whether you should get a pre-appraisal. If it’s an extreme seller’s market – meaning homes are tending to sell for more than what they’re worth – then getting a pre-appraisal can help you know how to list your home. Ask your Redfin agent if a pre-appraisal would be a good idea for you.

Key takeaways: Get a pre-appraisal if you’ve done significant home upgrades, there are no known comps, you’re selling the property on your own, or it’s an extreme seller’s market. 

Keeping the terms straight

There are a lot of terms that get thrown around when it comes to home prices, and it can be hard to keep them all straight. Which do you listen to, and which do you use to inform how to price your property?

Assessed value

The assessed value of your home is provided by a local tax assessor’s office and is used to determine how much you owe in property taxes. This value is typically much lower than both the appraised value and the fair market price, so it’s not a good idea to price your home based on this amount.

Appraised value

The appraised value is provided by a professional appraiser typically hired by the lender. This will take into account the entire property, including amenities, lot size, age of the house, and more. This is how much a professional appraiser believes your house is worth, given comparable properties and the local market.

Fair market value

The fair market value is how much a buyer is willing to pay for your house. This is typically the most common way of pricing a home. Sometimes the fair market value can be higher than the appraised value if a buyer is particularly attached to the home or the location is seeing significant demand and low supply. To figure out the fair market value of your home, you can work with a Redfin real estate agent to create a competitive market analysis 

What to remember: Pricing your home at or above the fair market value is the most comprehensive pricing strategy. Work with a Redfin real estate agent to create a competitive market analysis. 

How to increase appraised value?

The easiest way to sell your home for more than the appraised value is to get a good appraisal. You may have already had an appraisal done or a pre-appraisal, but you can improve your appraised value through several simple improvements.

• Focus on curb appeal (clean and maintained yard, updated garage doors, new exterior paint, sealed cracks in the driveway)
• Keep the inside of your house clean and tidy
• Add a fresh coat of paint on the inside
• Repair any damaged siding or roof shingles

Takeaways: You can increase appraised value by focusing on curb appeal, repairing anything that needs fixing, keeping your house tidy, and adding a fresh coat of paint.

How to sell a home for more than the appraised value?

Aside from improving your appraised value to increase how much your house sells for, there are several ways to sell your home for more than the appraised value.

Watch out for appraisal contingencies 

An appraisal contingency allows the buyer to renegotiate or pull out of the deal if the home is appraised for less than the agreed-upon purchase price. Obviously, this would make it difficult to sell your home for more than the appraised value. However, if your property is in a neighborhood that is in significant demand, buyers can waive the appraisal contingency when making their offers. Pay attention to comps in your neighborhood and how much they’ve sold for to determine if pricing above appraisal is a good idea for you.

Renegotiate the offer

If the appraisal comes back for less than the selling price and the buyer is taking out a loan, this is called an appraisal gap. In this case, you can offer concessions to incentivize the buyer – things like paying for closing costs or making requested repairs can help the deal still close. However, it is still up to the buyer to make up the difference between the appraised price and the selling price. If your buyer agrees to certain concessions, has the cash to cover the difference, and is really in love with the property, the deal may still close at the selling price. Be prepared to renegotiate  if the appraisal is significantly different from the selling price.

Sell to an all-cash

In certain seller’s markets, there are all-cash buyers who are willing to pay for a property in full. The benefit to the seller is that the buyer does not have to go to a lender to get a loan, meaning there’s no risk of an appraisal gap. If the buyer wants the property badly enough and is willing to pay more than it’s worth to be more competitive, you can sell your property for more than the appraised value.

Too long; didn’t read: Appraisal contingencies allow the buyer to pull out or renegotiate the deal if the appraisal comes back below the selling price. If that happens, you can offer concessions like paying closing costs or covering the cost of repairs. Or, if the buyer wants the property enough, they can pay the appraisal gap – the difference between the appraised value and the selling price. Finally, you can sell for more than the appraised value by attracting an all-cash buyer.

The bottom line: listing above appraisal

When deciding how much above appraisal you should list your house, consider what market you are selling in. While listing your home above its appraised value can be a strategic move in a competitive market like Portland or Los Angeles, where even rentals go for a high price, it requires careful evaluation of recent upgrades, neighborhood demand, and current buyer trends. By understanding the difference between appraisal, assessed value, and fair market value—and working with an experienced Redfin agent—you can price your home confidently and potentially attract offers that exceed your expectations.

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