In the competitive Palos Verdes real estate market, it is not uncommon for homes to receive multiple offers or sell above asking price. When that happens, many buyers and sellers wonder the same thing:

Will the appraiser bring the value in above the contract price?

The honest answer and one that surprises many people is that appraisers almost never appraise a property higher than the agreed-upon sales price.  Not because the home isn’t worth it, but because that is not their role.

Understanding how appraisers work helps buyers write stronger offers, helps sellers choose the best buyers, and helps both sides feel more confident during the escrow process.

Let’s break it down.

Appraisers Don’t Set Market Value — Buyers Do

In a desirable coastal community like Palos Verdes, true value is created by what a willing buyer is prepared to pay. Ocean views, privacy, schools, walkability to Lunada Bay’s town center, or a rare flat lot in Rolling Hills can add enormous value that doesn’t always show up neatly in comparable sales.

But appraisers have a very specific job:
To make sure the home is worth at least the price the buyer has agreed to pay.

Their responsibility is to protect the lender, not to determine the absolute maximum value of the home. Once the contract price is supported, they do not need to, and rarely will, go higher.

Why Appraisers Became More Conservative

During the mortgage crisis, thousands of appraisers across the country were sued for overvaluing homes. Lenders, buyers, and even government agencies claimed inflated appraisals contributed to financial losses.

As a result:

• Appraisal guidelines tightened dramatically
• Oversight increased
• Lenders required more justification for valuations
• Appraisers became far more cautious

Today, appraisers are trained and incentivized to be conservative.  If the sales price can be supported, they stop there.

There is no benefit to them, and potential liability, in appraising above the contract value.

What This Means for Palos Verdes Sellers

If you are selling a home in Palos Verdes, especially in neighborhoods like Montemalaga, Valmonte, Lunada Bay, or Malaga Cove where prices can escalate quickly, this is important to understand.

Even if:

• You have multiple offers
• Buyers are competing
• The home has unique features
• You believe it is worth more

the appraiser is unlikely to exceed the contract price.

This makes it essential to choose the right buyer, one who has the financial capacity to cover an appraisal shortfall if needed. As the top agent in Rolling Hills and one of the most experienced listing agents on the Peninsula, I always look closely at buyer strength, reserves, and loan structure before recommending an offer.

What This Means for Palos Verdes Buyers

For buyers, especially those new to coastal Southern California markets, this information is empowering.

When you write an offer, the home must appraise at or near the price you have agreed to pay. You should never expect the appraisal to come in higher, even if you feel you “got a deal.”

But here is the good news:
In Palos Verdes, where demand consistently exceeds supply, appraisers often have strong comparables to support current pricing even when values climb quickly.

Still, buyers should always be prepared for the possibility of an appraisal difference, especially on:

• View homes
• Newly remodeled homes
• Larger estate properties
• Homes with unique architecture or layouts
• Properties with significant land value

These homes often trade above what recent sales reflect because they offer something rare.

How I Help My Clients Navigate Appraisals

With over 25 years selling Palos Verdes real estate and more than one billion dollars in closed sales, I understand how to position a home so that it appraises smoothly.

For sellers, this means:

• Providing the appraiser with detailed upgrades, floor plans, and improvements
• Scheduling the appraisal strategically
• Highlighting view value, lot usability, and neighborhood-specific nuances
• Choosing buyers with strong financial profiles

For buyers, this means:

• Understanding appraisal risk before submitting an offer
• Structuring your offer to remain competitive
• Reviewing comps realistically
• Preparing backup strategies if value comes in lower

Experience matters, especially in a specialized market like ours.

The Bottom Line

Appraisers rarely value a home above the contract price. Their responsibility is simply to confirm that the property is worth at least what the buyer has agreed to pay, nothing more.

In a premium coastal market like Palos Verdes, where properties are often unique and buyer demand is strong, understanding how appraisals work gives both sides clarity and confidence.

If you are thinking about buying or selling in Palos Verdes, Rolling Hills, Rancho Palos Verdes, or Palos Verdes Estates, I am here to guide you through every step, including navigating the appraisal process with expert strategy.

Warmly,
Suzanne Dyer
Top Producing Realtor | Palos Verdes and the South Bay
Strand Hill | Forbes Global Properties
Number One Agent in Rolling Hills | Over $1 Billion in Sales
310 528 7480