3 Steps To Challenging A Low Home Appraisal During A Mortgage Transaction

Don’t Let a Low Appraisal Ruin Your Real Estate Transaction

In any residential real estate deal, there’s a lot riding on the home appraisal. If you’re selling a home, a low appraisal can make it difficult to get what your home is worth. If you’re purchasing and the appraisal comes in under contracted price, then you may not be able to secure financing.

For refinancing, a sub-par appraisal can result in higher interest rates or having private mortgage insurance premiums. It may even prevent the refinance from going through at all. Fortunately, you can challenge a low home appraisal. Talk with the experts and then follow these steps.

Get a Copy of the Appraisal

Before you can dispute the appraisal, you’ll need to know how and why the appraiser undervalued the home. By law you are supposed to receive a copy of the appraisal, so if you don't have it handy, ask your real estate agent or mortgage lender to get a copy of the appraisal for you. Reviewing it with them will give you useful insight into why the appraiser valued the home the way he did.

Do A Comparison

In the appraisal, you’ll find a list of similar homes to yours that the appraiser used to value your home. Sometimes, you may find that many of the homes on the list aren’t really comparable at all. Some may have smaller lots or lower square footage. Others may be in poor condition or lack similar upgrades and amenities. You may also find that the appraiser compared your home to sold listings in nearby, but less desirable neighborhoods or school districts.

Search for Comparables

Between you and your realtor, you should be able to come up with a list of additional comparable properties for the appraiser to consider for a re-valuation purpose. It may just be that the appraiser didn’t fully understand local market conditions or didn’t do the proper research or was just swamped with work - he is human.

Sell the Sizzle

It’s possible that the appraiser may have missed certain details about the house during the initial evaluation. For example, he/she may not have taken note of the upgrades - renovated kitchen, remodeled bathroom, or eco-friendly AC system. Make a list of as many upgrades as you can come up with, and have that ready to present to the appraiser.

State Your Case

Before ordering a second appraisal (if the lender will allow it), see if you can get the previous appraiser to reconsider their report. Don’t just give them your opinion; back it up with the data you’ve gathered. And who knows - They may see things your way and be willing to re-value the property.

Get a Second Opinion

If the appraiser simply won’t consider your request for a re-value assessment, and you feel strongly that the home’s value is higher than assessed then you may want to consider getting a second appraisal (if the lender will allow it). 

You may be able to demand a second appraisal from the mortgage lender. If granted, the bank will send another appraiser to inspect the property.  It will come out of your pocket, but it could turn a stalled real estate transaction into a success.

Best of Luck!

Whether you’re buying, selling, or refinancing a home, we hope you reach out to experts in your market to help you get the appraisal you need to get the deal done. Oh, and if you’re currently looking for a mortgage, we’re here for you!

Cheers-

Aundrea

Contact us today 702-326-7866

www.iLendLasVegas.com