Consumers should contact their lender to voice any concerns regarding their appraisals. Consumers have the option of filing a complaint regarding their appraisal or evaluation directly with their lender, or through the lender's federal regulator.
If your home appraisal is lower than expected when selling, a successful rebuttal can boost your confidence in the asking price and attract buyers willing to pay its true value.
Either the buyer or the seller can challenge an appraisal or request a second appraisal. "A challenge should be based on specific errors rather than opinions," notes Stephens.
Offering criticisms that aren't quantifiable, standardized, measurable, or fair. Telling an employee her sales numbers are below quota is fine. Telling an employee “her attitude needs work” is not. How can you tell the difference between the two?
Types of Bias in Performance Appraisal
Similarity Bias: When the appraiser favours employees who are similar to themselves in terms of gender, race, age, or other characteristics. Contrast Bias: When performance is rated based on the comparison with the performance of other employees rather than their merit.
Just keep your communication to the appraiser about the facts of the home and neighborhood, how you priced the house, and any other relevant information you think the appraiser should know. And remember, don't discuss value. Don't pressure the appraiser to 'hit the value' and you'll be fine.
You may even question whether the appraiser is a local and if they are familiar with the neighborhood. Can You Hire Another Appraiser? If you don't agree with the original appraiser's valuation, you and your real estate agent can request another appraiser. Typically, you'll have to pay for this yourself.
The lender makes a loan based on the loan-to-value ratio that was agreed to in the contract. Many contracts contain a loan contingency, so if the appraisal comes in low, the buyer cannot buy the property under the contract's terms and can then cancel the contract.
If you review the assessment objectively and feel it is off-base, write a rebuttal or provide comments on your performance appraisal. State clearly why you disagree with the evaluation. A rebuttal aims to add a permanent record to your current review.
There's often an addendum that allows buyers to back out without losing their earnest money deposit if the appraisal doesn't match the offer price. If the sellers stand firm and don't want to budge on price, the deal might fall through, sending the buyers back on their search for the perfect home.
Equally, if there is a well-understood appraisal system and the culture is to provide honest and detailed feedback, this becomes the norm, and any confrontation should be avoided.
These are common questions that many appraisers have. Unfortunately, there are no simple answers. They are all dependent on the specifics of the situation. That being said, appraisers can be sued for several reasons, including negligence, errors and oversight, failure to notice underlying issues, or even fraud.
Some of the factors that make a performance appraisal unfair are personal biases, comparing employees, changing standards, limited feedback, and a lack of training. Performance appraisals can have a detrimental effect on employees if unfairly conducted.
Appraisal is lower than the offer: If the home appraises for less than the agreed-upon sale price, the lender won't approve the loan. In this situation, buyers and sellers need to come to a mutually beneficial solution that will hold the deal together — more on that later.
A low appraisal could derail a home sale or refinance. If the appraisal comes in lower than the sales price, the home buyer won't be able to borrow enough money to cover the price of the home. They'll either have to pay the difference out of pocket or renegotiate with the seller to drop the sales price.
Homeowners can also ask to accompany the appraiser during the inspection, although they should run that by the lender first, as the appraisal is done on behalf of the bank. Homeowners can appeal an appraisal, but before taking steps to do that they should find out if the buyer is willing to pay the higher price.
Telling an appraiser that you think the house is worth more can backfire. It may make the appraiser suspicious of your motives. Appraisers are trained professionals who use market data to determine a home's value. They don't base their assessment on what the homeowner thinks.
If you review the assessment objectively and feel it is off base, write a rebuttal or provide comments on your performance appraisal. State clearly why you disagree with the evaluation. A rebuttal aims to add a permanent record to your review.
Appraisers do look in closets to determine the total square footage of the property. This doesn't mean every single inch of your house has to be in tip-top shape for the appraisal, but the interior of the home should be clean and free of clutter, and this includes closets, under sinks, and in the attic.
Your lender will reject your refinance request if the appraiser gives your house a market value that is too low. An appraiser will evaluate the interior and exterior of your home to determine its market worth. In turn, this includes a tour of your entire home, including your bedrooms.