Avoid These Things That Can Hurt a Home Appraisal

If Your Home Has Issues, Know What the Appraiser Will Flag — Before They Do

Most sellers don’t think about appraisals until the number comes in low. By then a deal is already under pressure and options are limited. But for sellers with condition issues, deferred maintenance, unpermitted work, or structural problems — the appraisal is the moment everything can fall apart.

I’ve bought homes in Texas where the traditional sale collapsed over an appraisal gap. The seller had a buyer, a contract, and a closing date — and then the appraisal came in $30,000 short. Lender wouldn’t fund. Buyer couldn’t cover the difference. Deal dead. That’s when they called us.

A cash buyer doesn’t need an appraisal. There’s no lender requiring a specific number. But if you’re considering a traditional listing first, understanding what appraisers flag helps you decide whether it’s worth trying — or whether a cash sale is the cleaner path from the start.

According to CoreLogic data, 8.6% of home appraisals came in below the contract price as of June 2024. Nearly one in ten deals. These aren’t rare surprises — they’re predictable problems that sellers walk into unprepared.

Deferred Maintenance — The Biggest Value Killer

This is the number one thing that hurts appraisals. Not outdated kitchens. Not small square footage. Deferred maintenance — the repairs you kept putting off. Appraisers are trained to spot neglect. A roof leak that wasn’t fixed and damaged the ceiling. A cracked foundation patched with caulk. Rotting wood around windows. Each one signals: this house hasn’t been taken care of, and there are probably more problems we can’t see.

What Appraisers Check Most Closely

• Roof condition — Missing shingles, visible sagging, or signs of water damage in the attic. A roof at the end of its life gets noted and adjusted for.
• Foundation — Cracks, settling, uneven floors, doors that won’t close properly. These trigger significant adjustments. Our guide on selling a house with structural issues covers what happens when the damage is significant enough to kill conventional financing entirely.
• HVAC systems — Old, failing, or non-functional heating and cooling. In Texas, a dead AC is not a minor issue.
• Plumbing — Active leaks, low water pressure, slow drains, water stains on ceilings below bathrooms.
• Electrical — Outdated panel, aluminum wiring, missing GFCI outlets near water sources.
• Exterior condition — Peeling paint, rotting wood trim, broken gutters, damaged siding.

Unpermitted Additions and Renovations

You finished the basement. Added a sunroom. Converted the garage to a bedroom. Spent $30,000 doing it. And the appraiser can’t count any of it. If work was done without a permit, appraisers typically cannot include it in the appraised square footage or give full credit for it. Worse — unpermitted work can actually hurt your value if it raises safety concerns or creates title complications.

Why Permits Matter

A permit means the work was inspected and met building codes. Without it, the appraiser has no way to verify it was done correctly. Lenders don’t want to finance improvements that might need to be torn out to meet compliance. If you have unpermitted work, options before listing include retroactive permits (call your local building department), disclosing as-is and pricing accordingly, or removing the addition if it’s creating a compliance problem. Our guide on selling a house with unpermitted work covers your options in detail.

Poor Curb Appeal and Landscaping

Appraisers form an impression before they walk through the front door — and that impression affects how they approach everything inside. Dead landscaping, an overgrown yard, peeling exterior paint, a cracked driveway tell the appraiser the property hasn’t been cared for. They start looking harder for what else might be wrong.

What Actually Moves the Number

• Fresh exterior paint is one of the highest ROI improvements — costs $2,000–$5,000 professionally and recovers most of that in appraised value
• Basic landscaping — mowed lawn, trimmed shrubs, cleared beds — costs almost nothing and makes a meaningful difference
• Driveway cracks and broken walkways get noted by appraisers as deferred maintenance
• A well-maintained fence adds value in family neighborhoods where it’s the norm

Location Factors You Can’t Control — But Need to Know About

Some things that hurt appraisals have nothing to do with your house. These aren’t fixable — but knowing about them helps you set realistic expectations and avoid a low appraisal surprise at the worst possible moment.

• Proximity to busy roads or highways — Traffic noise and safety concerns reduce value. Mitigation options include sound-dampening windows, privacy fencing, and landscaping buffers — but the location factor is still noted.
• Nearby distressed properties — Foreclosures and abandoned homes drag your comps down. Document the gap between your home and theirs when presenting to the appraiser.
• Flood zone status — A home in a Special Flood Hazard Area gets noted and buyers need flood insurance, which affects affordability and therefore value.
• Industrial neighbors — A factory, waste facility, or commercial operation nearby suppresses residential values. Make sure your comps reflect similar location conditions — not quiet cul-de-sacs two streets over.

Outdated Interiors and Functional Obsolescence

Appraisers have a term for features that no longer match what buyers want: functional obsolescence. It’s a real line item on the appraisal form and it reduces your value.

What Gets Flagged

• Closed floor plans — Compartmentalized layouts read as dated against open-plan comparables.
• Only one bathroom — A three-bedroom house with one bathroom gets adjusted down against comparables with two.
• Original 1970s or 1980s kitchens — Harvest gold appliances, laminate counters, and dark wood cabinets get compared unfavorably to updated kitchens in comps.
• Popcorn ceilings — If they contain asbestos, this becomes a material disclosure issue. If they don’t, scraping them is a cheap update that removes a dated visual signal. See our guide on selling a house with asbestos if this applies to you.
• Carpet over hardwood — Pulling the carpet to reveal hardwood often increases appraised value at minimal cost.

What’s Worth Updating

According to the 2025 Zonda Cost vs. Value Report, minor kitchen remodels return 96% of cost on average — one of the highest ROI projects available. Full gut renovations return far less.

Clutter, Odors, and Presentation

Appraisers are supposed to be objective. They’re also human. A cluttered, dirty, or bad-smelling home creates a negative impression that influences how they write up their condition report. They can’t explicitly penalize you for messy closets — but they can rate your home’s condition lower, and they will if the overall impression is poor.

• Pet odors — You stop noticing them. The appraiser doesn’t. Deep clean carpets, wash walls, and ventilate thoroughly before the visit.
• Clutter that hides storage space — A closet stuffed so full you can’t see the walls signals inadequate storage, which gets noted.
• Evidence of moisture or mold — Water stains on walls or ceilings, musty smell in basement or crawlspace. These raise red flags that require follow-up and often adjustments. Our guide on selling a house with mold covers what to do when the issue is significant.
• Smoke damage or odor — Nicotine staining on walls and ceilings is visible and flagged. A home where heavy smoking occurred indoors typically appraises lower.

What to Do If Your Appraisal Comes In Low

Request a Reconsideration of Value

You can’t directly challenge the appraisal as a seller — only the lender can formally request a review. But you can provide the lender with additional information: comparable sales the appraiser missed, documentation of improvements, evidence of errors in the report. Focus on factual errors first. Wrong square footage. Comparable sales that aren’t truly comparable. A renovation that wasn’t noted. These are the arguments that actually work.

Negotiate With the Buyer

If the appraisal gap is small — $5,000–$10,000 on a $350,000 house — negotiating a price reduction is often easier than fighting the appraisal. Buyers may also agree to split the difference or cover the gap in cash if they really want the property. Our guide on repair negotiations during the inspection period covers how buyers use appraisal gaps as leverage.

Get a Second Opinion

If the appraisal had clear errors — not just a lower number than you hoped — you can request a different appraiser. This costs another $400–$600 and isn’t guaranteed to produce a better result. But if the first appraisal was factually wrong, it’s worth pursuing.

Sell As-Is to a Cash Buyer

Cash buyers don’t need appraisals. There’s no lender requiring a specific value. The offer is based on condition, location, and market — and you close without an appraisal contingency killing the deal. If you’ve had a deal fall through over an appraisal, or you’re dealing with a property that has significant issues affecting value, this path eliminates the appraisal problem entirely. Our breakdown of why cash offers are priced the way they are shows what that trade-off actually looks like in numbers.

Quick Reference: Fix It or Skip It?

Bottom Line

Most appraisal problems are predictable. Deferred maintenance, unpermitted work, and poor condition are the top three — and all three are either fixable or manageable if you know about them before the appraiser shows up.

Do a walk-through of your own home with fresh eyes a few weeks before listing. Fix what’s obviously broken. Clean what’s visibly neglected. Document every improvement you’ve made. Give the appraiser a comp set that supports your price.

And if your home has issues significant enough that a traditional appraisal will hurt your deal — structural problems, major deferred maintenance, unpermitted work that can’t be resolved — a cash sale sidesteps the appraisal entirely. That’s not always the right answer, but when the numbers work, it’s worth knowing the option exists. Our complete Texas home selling guide covers both paths side by side.