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. However, the downside is that it doesn't guarantee a different nor higher market value of your house.
If the appraisal comes in lower than your offer, it means the lender may not be willing to finance the full amount you agreed to pay because they consider the property to be worth less than that amount. In such cases, there are generally a few options:
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.
If you decide you want to dispute the appraisal, work with your real estate agent to reconsider the value. You'll typically need to back up your request with comparable evidence, such as comparable properties or records indicating that the initial appraisal used incorrect or incomplete information.
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.
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.
Real estate appraisal fees are sometimes negotiable, so it's useful to consider this option. In some special cases, it may be appropriate to negotiate the appraisal fee. This usually occurs when you are buying a property located in a rural area, sometimes called a non-lender conversion property.
Home appraisals will never be 100% objective. After all, the appraiser is a human with their own biases and, oftentimes, incomplete sales data. That said, most appraisals are in line with the selling price. On average, only one in 10 home appraisals come in low, but this can vary from region to region.
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.
Poorly maintained homes or foreclosures have been known to drag property values down significantly. Their negative impact on appearances and security concerns will be taken into account when assessing area desirability levels.
In the world of property purchases, it's pretty standard for the sales price listed on the contract to be on par with the appraised value. This makes sense, as the agreed price usually mirrors the going rates in the current market.
Provide your lender with a written description of the problem with the appraisal or evaluation and provide any evidence you may have. For example, if the appraisal or evaluation has an incorrect living area size for the subject property, provide factual evidence which supports your position.
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.
If the buyer can't come up with more cash and the seller won't lower the price, the buyer may have no choice but to back out of the sale. If the purchase agreement doesn't contain an appraisal contingency, the buyer will lose their earnest money deposit and possibly even face legal action.
Submit a written request to the mortgage lender asking them to revisit the assessment—this is known as a Reconsideration of Value (ROV). State why you believe the appraisal is lower than it should be, providing evidence of errors or sharing comparable home sales that occurred just prior to the appraisal date.
Yahoo Finance tip: Your purchase contract must include an appraisal contingency, which states you can back out if the appraised amount is too low. Otherwise, you will forfeit the earnest money you put into the deal if you walk.
Contact Your Lender to Dispute the Appraisal
If you have the comps and other supporting information that demonstrate the appraisal is inaccurate, contact your lender to dispute the home appraisal, often known as a reconsideration of value, or ROV.
An appraiser will likely look in your closet to measure it to determine how big is it as larger closets and home with more square footage are more valuable. The appraiser will not assess the cleanliness of your closet.
Never discuss personality traits—especially negative ones. You can say, “You have a fabulous attitude.” But saying, “Your attitude isn't great” focuses on personality, not performance. Maybe your employee does have a bad attitude.
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.