What’s an Appraisal, and How Does It Affect My Loan?

Once your offer is accepted and the loan process begins, one crucial step determines whether the deal moves forward smoothly: the appraisal.

In Lubbock’s 2025 real estate market, appraisals protect both buyers and lenders by confirming that the home’s value matches the agreed purchase price. It’s an objective check to ensure no one is overpaying—or over-lending.

Here’s how it works:

1. The Lender Orders It
Your lender hires a licensed appraiser—a neutral third party—to visit the property, compare it to recent nearby sales, and assess its market value. Neither the buyer nor the seller chooses the appraiser to keep the process impartial.

2. The Appraiser Visits the Property
They’ll measure square footage, evaluate the home’s condition, and note upgrades, lot size, layout, and neighborhood trends. They also look at recent comparable sales (“comps”) within about a mile radius, adjusting for size, features, and quality.

3. The Report Comes Back
The appraiser issues a detailed report—usually within 7–10 days—stating the home’s appraised value. If that value meets or exceeds the purchase price, the deal moves forward.

But if the appraisal comes in low, things get interesting.

Here’s what happens:

• The buyer can renegotiate the price with the seller.

• The buyer can cover the difference out-of-pocket (known as an appraisal gap).

• Or, if neither works, the buyer can cancel under the appraisal contingency and keep their earnest money.

Low appraisals aren’t always bad news—they’re simply data. In some cases, they reflect outdated comps or unusual features that make the home tricky to value. I work with trusted lenders and appraisers who understand Lubbock’s micro-markets—from Cooper ISD’s new builds to established neighborhoods around Tech Terrace—to ensure context is never lost.

A strong appraisal not only validates your investment but can also affect your loan-to-value ratio (LTV), which determines interest rates and mortgage insurance. The higher your LTV, the more your lender views your loan as riskier.

Appraisals are one of those behind-the-scenes steps most buyers never think about until they hit a snag. That’s why I prepare my clients early—so there are no surprises, just strategy.

Because the best part of an appraisal isn’t the number—it’s the peace of mind that you’re buying something solid, inside and out.

— Insights from Tess Hernandez, Realtor | Reside Real Estate