Whether you’re buying, selling, or a real estate agent trapped in the middle of an appraisal debacle – this article is intended to help you navigate the process of getting a lift in value for your low appraisal!
One of the more frustrating events that can happen in a real estate deal or home refinance is the appraisal coming in lower than the agreed upon purchase price (or desired value in the case of a refinance). If you have, or are thinking about, refinancing or buying/selling a piece of property (or know someone who is) then there’s a good chance that this effects you.
Don’t fret! After we take a look at the 3 steps you need to challenge a low appraisal, you’ll be confident that your deal is going to close!
Disclaimer: There’s no full proof way to guarantee the value will be adjusted. Reason being, there is a chance that the house really isn’t worth what the buyer was willing to pay. Basically, maybe the appraiser is right.
3 Steps to Contest an Appraisal:
- Breathe. Then go out and start searching for other, similar, sales that the appraiser did not include in their report. The easiest way to get a bump in value is to introduce new information.
- Call. Let the appraiser know that you’ve discovered some other comparable sales that should be considered. KEEP IN MIND. You are challenging the appraiser’s opinion/work/expertise/etc. If you do not handle with care you will not get a favorable response from the appraiser. So, be kind, sincere, and direct. You’ll also need to let the loan processor know that you’re contesting the appraisal. Many times they’ll be the one to formally submit the information. With Appraisal Management Companies there is a very specific way that this process is handled. What the loan processor can and can’t say is pretty narrow. So, you have to be mindful of that when stating your case to the loan processor.
- Follow up. Normally there are time frames surrounding how long the appraiser has to make an adjustment. The loan type (FHA, VA, Conventional, etc.) will determine these dates. So, act early, act often, and keep a positive attitude that you can get to the finish line successfully!
>If obtaining an FHA appraisal, make sure the appraiser has the proper certification.