Ever wonder what really happens between going under contract and the lender’s final approval in a Dallas home sale? For many buyers and sellers, the appraisal is the most opaque step. You want to know how value is determined, what can affect that number in Preston Hollow, and what to do if it comes in lower than the contract price. In this guide, you’ll learn how Texas appraisals work, what appraisers look for in high-end Dallas neighborhoods, and how to prepare so you can minimize surprises. Let’s dive in.
Appraisal basics in Texas
Purpose and independence
An appraisal is an independent opinion of market value prepared for a specific client, most often your mortgage lender. The appraiser’s job is to help the lender manage risk by confirming the property supports the loan amount. Appraisers must remain objective and follow professional standards and lender rules. Lenders typically select the appraiser, often through an appraisal management company.
Standards and licensing in Texas
Appraisers follow the Uniform Standards of Professional Appraisal Practice. You can learn more about these standards from the Appraisal Foundation’s USPAP resources. In Texas, licensing levels include Trainee, Licensed Residential, Certified Residential, and Certified General, overseen by the Texas Appraiser Licensing & Certification Board. For higher-value or complex homes, lenders may require a Certified Residential or Certified General appraiser.
How appraisers value Dallas homes
Sales comparison approach
For most single-family homes, the Sales Comparison Approach is primary. The appraiser selects recent, nearby comparable sales, makes adjustments for differences, and reconciles to a final opinion of value. Lender guides outline these expectations; see the Fannie Mae Selling Guide appraisal requirements and Freddie Mac appraisal products and waivers for context.
Adjustments explained
Appraisers adjust each comparable to reflect the subject home’s features. Adjustments are typically in dollars and are based on market evidence. They may use paired-sales analysis, market-based price per square foot for living area differences, and specific dollar adjustments for features like pools, garages, and site size. The goal is to isolate how the market values each difference, then reconcile a supportable range of value. For deeper background, the Appraisal Institute guidance on adjustments is a helpful reference.
Preston Hollow adjustments that matter
- Lot size and privacy. Large or wider lots are scarce in many pockets of Preston Hollow, and lot premiums can be meaningful. Appraisers may compare lot sales on a per-square-foot or per-acre basis to support these adjustments.
- Living area and layout. Price per square foot is only part of the story. Design quality, natural light, and floor plan flow can influence how buyers view value at the high end.
- Luxury finishes and systems. High-end kitchens, custom millwork, designer fixtures, and whole-house automation may justify adjustments when supported by market data. Providing invoices and photos helps the appraiser verify quality.
- Outdoor amenities. Pools and spas, guest houses, sport courts, outdoor kitchens, and professionally landscaped grounds are common in Preston Hollow. Appraisers look for comps with similar amenities to support adjustments.
- Condition and utility. Recent remodels, new roofs, and mechanical upgrades can support value, while deferred maintenance or functional limitations may require negative adjustments.
What to expect on timing and scope
Most lender-ordered appraisals follow a predictable flow. The lender orders the appraisal after you apply for the loan. The appraiser inspects the property, researches local sales, selects 3 to 6 comparable sales, applies adjustments, and prepares a written report. Typical turnaround is about 3 to 10 business days, depending on complexity and market volume.
Lenders use different report formats. The full interior appraisal is most common for purchase loans. In some cases, lenders accept exterior-only or desktop products per agency guidance. Eligibility for appraisal waivers or limited-scope products varies; high-value and unique homes are less likely to qualify under Fannie Mae and Freddie Mac guidelines.
Appraisal gaps and your options
An appraisal gap happens when the appraised value is lower than the contract price. Because lenders base the loan on the lower of the appraised value or purchase price, a gap can impact your loan amount and cash-to-close. Here are common ways buyers and sellers respond, subject to your contract and lender rules:
- Increase the down payment to cover the gap in cash.
- Renegotiate the price or request seller concessions.
- Provide additional market evidence and request a review.
- Ask the lender for a reconsideration of value process.
- Request a second appraisal if permitted by the lender.
- Use an appraisal contingency to terminate within deadlines.
Reconsideration of value steps
If a valuation seems off, you can submit a clear, documented request through the lender. Helpful items include:
- Recent closed sales the appraiser did not use, with MLS detail and closing statements.
- A detailed list of upgrades with receipts and permits.
- Floor plans and measured living area documentation.
- Lot evidence, such as surveys, plats, or aerials that show size, width, or privacy benefits.
Keep the package concise and fact-based. The lender will route the information to the appraiser or a reviewer according to policy.
Local factors in Preston Hollow
Preston Hollow is an established Dallas neighborhood with a mix of custom homes and sizable lots. Because truly similar comps can be limited at any moment, appraisers may reference nearby high-end areas and explain adjustments for location differences. Across the Dallas, Plano, and Irving metro, price per square foot varies widely by submarket. Appraisers prioritize immediate neighborhood comps before expanding outward. Regional supply and demand also play a role. In fast-moving markets, closed-sale data can lag current contract activity. For broader context on Texas housing trends, review the Texas A&M Real Estate Center market data.
Appraisers confirm lot sizes and ownership details using county appraisal district records and rely on MLS for sales verification. Clear documentation from you and your agent helps the appraiser validate unique features that may not be obvious from public data.
Seller prep checklist
A strong prep package helps the appraiser verify your home’s quality and supports fair adjustments. Consider compiling:
- Recent appraisal or a detailed broker price opinion with documented comps.
- A complete list of upgrades and renovations with dates, contractors, permits, and receipts.
- High-resolution photos and aerials that illustrate the lot, landscaping, and privacy.
- A current survey, plat, and measured living area documentation.
- A features list, from guest house or casita to wine room, theater, or whole-house systems.
- Landscaping and irrigation details, and any tree surveys if mature trees are a value factor.
- HOA or deed restrictions that affect use.
- Roof age, HVAC replacements, and other system records.
Buyer steps if the value comes in low
If the appraisal is below the contract price, act quickly and stay within contract timelines. A practical playbook includes:
- Gather stronger comps with MLS reports and settlement statements.
- Collect invoices and permits for recent upgrades the appraiser may have missed.
- Draft a concise cover letter explaining lot characteristics, finishes, and market movement.
- Model your options, including cash to bridge, a price change, or seller credits.
- Follow the lender’s reconsideration process and deliver only the most compelling evidence.
For contract strategy and contingency wording, consult the Texas Real Estate Commission contract forms. Use only language approved by your lender and broker.
How FHA, VA, and conventional differ
All loans require an opinion of value, but the scope can vary by program. FHA appraisals also look for minimum property standards and may require repairs before closing; see the FHA Single Family Housing Policy Handbook for details. VA appraisals confirm value and basic property condition. Conventional loans follow agency rules and may offer limited-scope products or waivers in specific scenarios. Unique and high-value homes are less likely to qualify for waivers under Fannie Mae and Freddie Mac guidelines.
How your agent can support value
In Preston Hollow, where lot size, privacy, and high-end finishes vary block to block, a thoughtful appraisal presentation can reduce risk. Here is how a strong listing agent prepares:
- Identify the best 3 to 6 comps, prioritizing recent, nearby sales. If one older sale best captures a rare lot or amenity, include it with an explanation.
- Build a clear adjustments rationale for each comp, including living area, lot size, age, condition, and luxury finishes. Use lot price per square foot or per acre when needed.
- Provide documentary backup: MLS sheets, public record data, surveys, plats, aerials, upgrade receipts, and high-quality photos.
- Write a one-page market narrative outlining neighborhood dynamics, low inventory, price per square foot trends, and why the subject aligns with recent high-end closings.
- Deliver a concise, organized packet to the appraiser at listing and immediately after going under contract.
- If the valuation comes in low, submit a focused reconsideration request with only the strongest new evidence.
This process is factual, not persuasive. The goal is to make the appraiser’s job easier by verifying features and pointing to the best market evidence.
Final thoughts
Appraisals are a lender tool, but they affect your move, your cash, and your timeline. When you understand how appraisers work in Texas, you can price smarter, present your home accurately, and respond quickly if a gap appears. With the right preparation, most surprises are avoidable and many issues are fixable.
If you are thinking about selling in Preston Hollow or buying across Dallas, and you want a clear plan for valuation and risk, connect with Jeremy Whiteker. Get your questions answered, see the comps that matter, and get your home valuation.
FAQs
What is a home appraisal in Texas and who orders it?
- An appraisal is an independent opinion of market value used by your lender to underwrite the loan; the lender usually orders it and selects the appraiser.
How long does a Dallas appraisal usually take?
- From order to delivery, most appraisals take about 3 to 10 business days, depending on the home’s complexity and market volume.
Do pools and guest houses add value in Preston Hollow?
- They often do when supported by comparable sales; appraisers look for similar amenities in recent nearby closings and adjust based on market evidence.
What if an FHA appraisal notes repairs on my Dallas home?
- FHA appraisals include minimum property standards, so certain repairs may need to be completed before closing per the FHA policy handbook.
Can I get an appraisal waiver on a conventional loan in Texas?
- Some loans may qualify for limited-scope products or waivers under Fannie Mae or Freddie Mac rules, though unique or high-value homes are less likely to qualify.
How do appraisers handle lot size and mature trees?
- In neighborhoods like Preston Hollow, lot width, depth, and mature landscaping can influence value; appraisers confirm site details and use comps to support any lot or privacy adjustments.
