Low Home Appraisal? Should You Challenge It?
What if your appraisal comes in lower than you want?
An appraiser's job is to be impartial on the value of your home. But what if you believe your home is worth more than it was appraised for?
First, it's important to consider if your opinion of value is unbiased? Is it what you WANT for the house, or what you KNOW it's worth?
If you still believe your home is worth more than it was appraised for, you can challenge the appraisal. But - you must be prepared to point out mistakes the appraiser made in comparing other properties or by missing new or upgraded features in your home.
These 3 steps won't guarantee the outcome you're looking for, but they should help protect against honest mistakes.
1. Give the appraiser a reason to change opinion.
Read your home appraisal, then consider whether you can offer the single most persuasive item: new comparables.
An appraiser’s selection of comparable sales is based on many factors like location, size, age, and condition of the home. In some cases, your appraiser might not know all the homes in your neighborhood that have sold recently - especially if they were not listed on MLS. Your lender, usually after consulting with your real estate agent, can advise if they think new comparable are logical. If the lender doesn't have a compelling reason to doubt the appraisal, then that tends to be the end of the line.
2. Highlight the changes you've made to your property.
An appraiser might not have noticed your home's new or upgraded features: an upgraded kitchen, redone bathrooms, new roof, new furnace, updated central air conditioning, or new fireplaces. Point them out and make sure they are taken into account.
3. Seek a second opinion.
You can attempt to sway your lender to revise the appraisal by getting one on your own. If you need an appraisal in the Phoenix, AZ area, call Master Appraisal Services.
In the end, you may or may not be able to get the value changed. The appraiser has to answer to underwriters and state regulators as well as following the Uniform Standards of Appraisal Practice (USPAP), so they're not very willing to change values unless there is an error in the report (missing adjustment, math error etc.) or new information that was not available initially is provided.
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