What Is a Home Appraisal?
An appraisal is an independent opinion of your home's market value, ordered by the lender and conducted by a licensed appraiser. It protects the bank from lending more than the property is worth — and it protects you from overpaying. In Ohio, conventional loans require an appraisal before closing. The buyer typically pays $400–$600 at the time of the inspection.
How Appraisers Determine Value
Appraisers use the sales comparison approach — finding 3–5 comparable homes (comps) that sold within the last 6 months within a half-mile radius. They adjust for differences in square footage, condition, bedrooms, bathrooms, lot size, and features. In rural Ohio markets, where comps can be harder to find, appraisers may pull from a wider geographic area or go back 12 months.
What Happens If the Appraisal Comes In Low?
A low appraisal creates a gap between what you agreed to pay and what the bank will lend. You have four options: (1) renegotiate the price down to appraised value, (2) make up the difference in cash (appraisal gap coverage), (3) challenge the appraisal with additional comps, or (4) walk away if you have an appraisal contingency. In a competitive market, many Ohio buyers waive the appraisal contingency — which means if it comes in low, they're on the hook for the difference.
How to Protect Yourself
The best protection against a low appraisal is writing an offer that's defensible against recent comps — not $50K over list because emotions ran high. Your buyer's agent should run comps before you write any offer so you understand the risk. If you're waiving the appraisal contingency, know your walk-away number in advance. And make sure your lender is working with local appraisers who know the Cincinnati market — out-of-area appraisers routinely undervalue homes in tight suburban markets like Mason, Loveland, and Montgomery.