How to Counter an Appraisal?

Check every detail of the appraisal

Once you receive a copy of the appraisal report it’s riddled with data, and information throughout the several pages of the report. Ensure that you open up the report and review every single detail of the appraisal. Jot down the comparables used and the pricing for each of the adjustments made. Make a note of the comps that were not used that you used or any other missing information it should be in the report. It’s best to figure out why those comparables were not used in the report.

Be sure to review the following values:

1. Square footage
2. Bedroom Count
3. Bathroom Count
4. Lot size
5. Location on the block of each home
6. Condition of the homes
7. Age of the homes
8. Amenities of the homes
   1. Central Air
   2. Driveway? Garage?

Missing information could very well alter the appraisal report. Do your due diligence and take your time

Contact your lender and request a value appeal

Connect with your lender and let them know that you found either erroneous or missing information. Connect with your lender and request to appeal the report. They will provide you with the necessary steps in order to do so. This is another opportunity where you will have to be able to connect with your lender and provide the reasoning and justification for the appeal. They will forward that over to the  appraiser in order for them to respond and hopefully update the appraisal report

Provide updated comps

After reviewing the report, did the appraiser use the most relevant comparables? Are there any significant discrepancies with the similarities or data the appraiser used? This is your opportunity to provide the comparables. Ensure you work with a licensed, and local real estate agent to provide you with a CMA (Comparable Market Analysis).  this is a report that combines all of the comparable properties  in a detailed and aesthetically pleasing report. The expertise and influence of the Realtor should help impact the significance of your appeal and the comparables used. 

Provide improvements and upgrades to your appraiser 

The amenities inside the home, the upgrades and the finishes themselves, all provide value whether good or bad to the property. When a residential property is valued, may not always be 100% identical to your subject property. This means adjustments need to be made using the comparable properties to your subject property. When those comparisons are made, since they will not be identical, adjustments are made.

This means the appraiser needs to have all of the necessary information to include minor and major upgrades and improvements, and the date completed. Take your time and look around your home. Review the pictures from your neighbors properties in order to compare what you have versus those comparable properties nearby. Since you live in the home  and see these upgrades every single day, it’s possible every item might not be noticeable  or you may even forget  what it used to be.  take the time now to  do your homework as it may  pay big dividends later on.

Appeal  an appraiser who doesn’t know the area

Market knowledge Is important for the appraiser to be aware of and have.  there may come a time where a bank will connect with an appraisal company and that company will send an appraiser that is out of state or out of the area.  when this occurs the appraiser may actually not even  visit  your property, let alone the inside of your home.

This causes issues as the appraiser is not  compiling the most accurate and relevant data. There is a big difference for example if you’re home the has carpet vs. hardwood and tile flooring throughout versus white appliances and stainless steel appliances. If the appraiser is unable to visit the inside of the property to capture that data, these details could impact the value of the property.

The market knowledge aspect is the appraisers ability to find relevant and true comparables. The information found on the MLS ( multiple listing service)  will not provide details about the market itself or The Neighborhood. for example, there is no field that discerns the difference between model homes and the layout of homes between each other.  let’s say, for example the layout and model and style of 1 home is completely different than the subject property. While the details of the square footage and the bedroom and bathroom may be the same, the appraiser is missing out on data that  could affect the after repair value of the property.

In this instance, reach out to your lender and let them know that the appraiser did not visit the property. The appraiser did not enter the home. The appraiser is not from the area and therefore will not have the local market knowledge necessary to appraise and value the property.

Commit to a second opinion 

Should all else fail, and the bank and or the  appraiser not change their opinion, get a second opinion. It’s important to note that while the appraisal May cost anywhere between $400 and $500,  it could make a drastic difference if the value of the property is tens of thousands of dollars lower than what it should be.

While it may take another week or two, the amount of money that you will receive may very well be worth it!