The home appraisal is one of the most important (and often least understood) steps in the real estate process, especially in high-value markets like Malibu. Whether you're buying, selling, or refinancing, the outcome of the appraisal can directly impact your deal. If you're wondering what happens during a home appraisal, this guide breaks it down in plain terms and explains what to expect in a market where precision matters.
What Is a Home Appraisal and Why Does It Matter?
A home appraisal is a professional, third-party opinion of a property’s market value. For buyers and lenders, it's a safeguard, ensuring the loan amount doesn't exceed what the home is truly worth. For sellers, it can either confirm your list price or introduce new negotiations if the appraised value falls short.
In Malibu, where ocean views, privacy, and location can dramatically influence pricing, appraisals require careful attention to detail. A property’s proximity to the beach, architectural uniqueness, and even its street can swing value estimates significantly, making the appraiser’s role especially crucial.
Who Orders the Appraisal?
In most transactions involving a mortgage, the buyer’s lender orders the appraisal. This ensures the lender isn't over-financing a property. However, the cost is usually paid by the buyer and ranges anywhere from $500 to $1,500+ in a luxury market like Malibu, depending on the complexity of the home.
The lender chooses the appraiser through a neutral third-party service or appraisal management company, meaning neither the buyer nor seller gets to pick who evaluates the home. This neutrality helps maintain fairness and consistency.
What Happens During a Home Appraisal?
An appraiser’s job is to assess the property and determine its fair market value based on recent comparable sales, the condition of the home, and the local market. Here’s what typically happens during a home appraisal:
1. Property Visit
The appraiser visits the home in person. In Malibu, this includes evaluating the home’s square footage, architectural style, lot size, condition, and location. If it has unobstructed ocean views, high-end finishes, or luxury amenities like a pool or guest house, those features are all factored in.
2. Interior and Exterior Inspection
The appraiser walks through the home, noting the layout, number of bedrooms and bathrooms, quality of finishes, renovations, and overall upkeep. They also inspect the exterior, including landscaping, driveway, and overall curb appeal. The goal is to compare the property against others recently sold in the area.
3. Comp Analysis (Comparables)
The appraiser will research similar properties that have sold in the past 3–6 months within the same area. In Malibu, comps might range dramatically depending on location (think Carbon Beach vs. the hills above the PCH), so experience in the area is vital for accuracy.
4. Final Valuation Report
The appraiser compiles all data into a detailed report that includes property photos, a map of comparable homes, a value estimate, and any notes that explain the final number. This report is then sent to the lender, who shares it with the buyer.
Understanding what happens during a home appraisal helps sellers prepare their property more effectively and helps buyers feel confident in the numbers.
What If the Appraisal Comes in Low?
This is where things can get complicated. If the appraisal comes in below the agreed-upon purchase price, the lender may only finance up to the appraised amount. That leaves a few options:
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The buyer covers the difference out of pocket
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The seller agrees to lower the price
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Both parties renegotiate to find middle ground
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Either side walks away from the deal (depending on the contract)
In Malibu’s competitive and high-value market, low appraisals aren’t common but can happen, especially if a property has unique features that aren’t easily comparable. This is why it’s critical to price your home appropriately and have an experienced local agent by your side.
How Sellers Can Prepare for an Appraisal
If you're selling, the appraisal might feel like a wild card, but you can take steps to present your home in the best light:
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Tidy and declutter the home to showcase its condition and space
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Compile a list of recent upgrades or renovations, especially those with receipts or permits
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Share comps your agent has pulled, particularly if they highlight higher-priced sales
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Make sure all utilities are on, and the appraiser has full access to the home, garage, and yard
In Malibu, small details matter. A fresh coat of paint, manicured landscaping, or updated fixtures can subtly improve a home's perceived value.
Appraisals for Luxury or Unique Properties
Not every home in Malibu fits into a standard pricing model. Beachfront estates, architectural homes, or properties with unusual layouts often require a more nuanced appraisal approach. In these cases, appraisers rely more heavily on expert judgment and high-end comps, which may not always be recent or directly comparable.
This makes local expertise even more valuable. Knowing what happens during a home appraisal and how to support your property’s value with the right data can make or break a luxury sale.
Timeline and What Happens Next
Typically, appraisals take place shortly after a contract is signed, and the report is delivered within 7–10 business days. Once the report is in:
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If the value meets or exceeds the purchase price, the loan proceeds as planned.
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If the value is lower, the buyer and seller must address the difference before moving forward.
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In some cases, a buyer may request a second appraisal or reconsider financing terms.
Regardless of the result, your real estate agent will help you interpret the report, negotiate as needed, and keep the process moving.
Work with an Agent Who Knows What to Expect
Appraisals are just one part of the transaction, but they carry real weight, especially in Malibu’s unique and often high-stakes market. Knowing what happens during a home appraisal helps buyers and sellers stay ahead of surprises and navigate the process with more confidence.
Need Help Navigating Your Malibu Appraisal?
Whether you're buying your dream beach house or preparing to list a one-of-a-kind estate,
Robert Edie offers the local insight and negotiation expertise you need. With deep experience in the Malibu market, Robert understands what drives value, how appraisers think, and how to support his clients every step of the way. Reach out today to get the guidance you deserve, from offer to appraisal and beyond.
