Are you worried an appraisal could derail your San Carlos purchase or sale? You are not alone. Appraisals can feel opaque, yet they play a key role in whether a lender will fund a loan. In this guide, you will learn how appraisals work, what appraisers focus on in San Carlos, how to prepare, and what to do if the value comes in lower than expected. Let’s dive in.
What an appraisal does
An appraisal is an independent estimate of market value prepared by a licensed appraiser. In a purchase, the lender is the appraiser’s primary client. The lender uses the report to confirm the property supports the loan amount.
An appraisal is different from other tools you may encounter:
- Appraisal vs. home inspection: The appraisal focuses on market value. An inspection focuses on condition and safety.
- Appraisal vs. CMA: A comparative market analysis is created by an agent to guide pricing or offers. It is helpful but is not an independent appraisal.
Appraisals reflect a point in time. The value is typically set as of the date the appraiser inspects the property or as required by the lender.
How the appraisal works in San Carlos
Timeline and who is involved
After you apply for a loan and go under contract, the lender orders the appraisal. Many lenders use an appraisal management company to assign an appraiser. Scheduling usually begins within a few days of contract acceptance. Final reports often arrive in a few days to 1 or 2 weeks, depending on complexity and workload.
The appraiser inspects the property and compiles a report for the lender. The lender then reviews the report as part of underwriting.
Report types you may see
- Full interior and exterior appraisal report. Most common for conventional purchases.
- Drive-by or exterior-only report. Sometimes used for low-risk or refinance loans.
- Desktop or other program-specific formats. Less common for purchases.
What appraisers look at
Appraisers document features that influence market value. Expect notes and photos covering:
- Site details: lot size, topography, usable yard, landscaping
- Structure and layout: gross living area, bedroom and bath count, flow, condition, and finishes
- Systems: roof, HVAC, plumbing, electrical as observed
- Location: street and block, access to amenities and transit, proximity to noise sources
- Comparable sales: photos and data for the comps used
How value is determined
Appraisers rely on three approaches to value, but one matters most for San Carlos single-family homes:
- Sales Comparison Approach. This is the primary method. The appraiser selects recent comparable sales and adjusts for differences such as size, beds and baths, condition, lot utility, view, and parking.
- Cost Approach. Useful for new or unusual homes. It is often less influential for typical San Carlos properties.
- Income Approach. Used for income properties. It is rarely applicable to owner-occupied single-family homes.
Comps in a low-inventory market
In San Carlos, inventory can be tight and many homes are remodeled. Finding truly similar recent sales can be hard. Appraisers may need to widen the search radius or time window and make larger adjustments. This can increase variance in outcomes, which is why documentation and local context matter.
Local factors that move value in San Carlos
San Carlos sits on the mid-Peninsula with access to Highway 101, I-280, and Caltrain. It is close to job centers across the Peninsula and Silicon Valley. Housing is largely single-family with a mix of original and remodeled homes. Here are common value drivers appraisers consider in this market:
- Commute accessibility. Proximity to corridors like 101 and 280, Caltrain, and employer centers in Redwood City, Menlo Park, and Mountain View influences demand.
- School district context. Many buyers review publicly available school information and boundaries when comparing homes. Appraisers note the patterns of buyer preferences reflected in the data for comparable sales.
- Microclimates and ridgelines. View lots and elevated locations in the east hills can command premiums. Flatter, denser neighborhoods may show different price profiles.
- Remodeling and ADUs. Updated kitchens and baths, open layouts, and permitted ADUs or finished areas can add value, especially when supported by comparable sales and permit records.
- Zoning and expansion potential. The ability to add living area or an ADU under local rules can be a factor for buyers and appraisers.
- Local risks. Appraisers note seismic risk context and visible retrofit elements, flood and natural hazard zone status, and proximity to noise sources like El Camino Real, Highway 101, or rail lines. These can affect the buyer pool and financing terms.
Preparing for an appraisal as a seller
A strong first impression and thorough documentation help an appraiser understand your home’s market position. Use this checklist:
- Gather documentation. Assemble permits and finaled inspections, receipts for major improvements, floor plans, HOA documents if applicable, and utility info for unique systems.
- Create an upgrades list. Include dates, contractors, materials, and before-and-after photos when available.
- Tackle visible repairs. Address roof leaks, significant deferred maintenance, safety concerns, and items that signal condition issues.
- Stage for function. Clear pathways and show accurate room usage. Appraisers measure living area and verify room counts.
- Share a comps packet. Ask your listing agent to leave recent relevant sold comps, notes on differences, and your documentation packet for the appraiser. Appraisers are independent, but factual information is welcome.
If you are a buyer: outcomes and options
When the report arrives, you will see one of three outcomes:
- At or above contract price. The loan proceeds as expected.
- Below contract price. The lender will base the mortgage on the appraised value, not the contract price.
If the value comes in low, you typically have options:
- Renegotiate the price with the seller.
- Bring additional cash to bridge the appraisal gap so your loan-to-value ratio still works.
- Request a Reconsideration of Value from the lender by submitting better comps or correcting errors.
- Order a second appraisal or desk review if your lender allows it.
- Cancel if you have an appraisal contingency that covers this situation.
How to challenge a low appraisal wisely
Focus on facts, not frustration. A strong challenge includes:
- Recent closed sales that are more comparable than those used
- Corrections to errors such as square footage, bed and bath counts, or location
- Clear documentation of permitted improvements and quality of finishes
Avoid arguing based on emotion or list price alone. The lender will look for verifiable sales data and material errors.
Appraisal contingencies and timelines
Many contracts include an appraisal contingency. It gives you time to receive the report and the right to renegotiate or cancel if value does not meet a stated threshold. Be precise about timelines in your offer. In competitive situations, some buyers limit or waive this contingency, which increases risk if the appraisal comes in low.
Costs and turnaround in San Mateo County
Fees vary by county and complexity. Higher-cost markets like San Mateo County tend to have higher appraisal fees than lower-cost areas. Unique homes, larger properties, rush orders, and extensive permit histories can add cost and time. Plan for the appraiser’s on-site visit plus lender review after the report is submitted.
Lending programs and how they affect appraisals
- Conforming versus jumbo. San Mateo County is a high-cost area. Even with higher conforming loan limits, many San Carlos purchases use jumbo financing. Jumbo loans may have stricter lender review of the appraisal.
- FHA, VA, and other programs. These programs have unique appraisal and property condition requirements. FHA, for example, uses Minimum Property Standards that can trigger repair conditions.
- Appraisal Management Companies. Many lenders order through AMCs, which can affect who is assigned and how quickly the inspection is scheduled.
Regardless of program, California appraisers are licensed and follow professional standards of independence and documentation.
Permits, unpermitted work, and ADUs
Appraisers review public records and permit history to verify what is considered living area and to understand the scope of improvements. Unpermitted conversions or additions may receive limited or no contributory value in the report, and lenders may require permits for certain improvements to count for financing. If you have an ADU or significant remodel, provide clear permit documentation.
What an appraisal cannot do
It is helpful to set expectations:
- It is not a home inspection. Appraisers are not performing code or system diagnostics.
- It does not guarantee future performance. The opinion reflects market conditions at a specific point in time.
- It is not a replacement for market strategy. Pricing, staging, and negotiation still matter for your outcome.
Practical tips to keep your deal on track
- Build time into your contract. Give the appraiser access quickly and allow for lender review.
- Share facts, not pressure. Provide documents and comps, then let the appraiser do the analysis.
- Align your offer with comps. A data-informed strategy reduces the chance of a large appraisal gap.
- Know your plan B. Decide in advance how you will handle a low appraisal so you can move quickly.
Helpful local resources to consider
Appraisers and agents in San Carlos commonly reference local MLS data for closed sales, San Mateo County Assessor and Recorder records for parcel and deed history, the City of San Carlos building department for permits, and publicly available hazard tools such as FEMA flood maps and California Geological Survey resources. Your agent can help you pull the right records and interpret what they mean for value.
Ready to move forward?
You do not have to navigate the appraisal process alone. If you are buying or selling in San Carlos, get a clear plan grounded in local data, permit verification, and a financial-first strategy. Start with a free home valuation and a calm, step-by-step approach with Daniel Fridman. Hablamos español.
FAQs
Who pays for the appraisal in a San Carlos purchase?
- The buyer usually pays the appraisal fee as part of loan closing costs, unless the contract states otherwise.
Can a seller order an appraisal before listing in San Carlos?
- Yes. A pre-listing appraisal can help inform pricing, though a buyer’s lender will still order its own appraisal for financing.
How long do appraisals take in San Carlos?
- Scheduling often begins within days of contract acceptance, with many reports delivered in a few days to 1 or 2 weeks depending on complexity and workload.
Will an appraiser count unpermitted remodels or ADUs?
- Unpermitted work may be discounted or noted. Lenders often require proper permits for the improvement to contribute fully to value for financing.
What documents should I give the appraiser?
- Provide permits and finaled inspections, invoices for major upgrades, floor plans, a list of improvements, and recent relevant comparable sales.
What happens if the appraisal is lower than the purchase price?
- You can renegotiate price, bring additional cash, challenge the report with better comps, seek a second opinion if allowed, or cancel if covered by an appraisal contingency.
Are online estimates a substitute for an appraisal?
- No. Online tools can be a general check, but licensed appraisers rely on verified local sales, permit history, and on-site observations for accuracy.
