The appraisal came in low. Can I appeal it?
Okay, deep breaths. You’ve just gotten the appraisal back on what you thought was your soon-to-be new home or the home you’re selling, and the number is making you do a double-take. It's low. Not just 'Oh, that's a bit disappointing' low, but 'Are they sure they looked at the right house?' low. Before you start questioning your sanity or the appraiser's eyesight, let's chat about your options. Can you appeal a low appraisal? Spoiler alert: Yes, you can, and here's how the game is played.
Don’t Panic, Strategize!
First things first, let's not let panic lead the dance. A low appraisal isn’t the end of the world or the deal. It’s a common speed bump in real estate transactions that can often be navigated with a little finesse and a lot of facts.
Understanding the 'Why'
To appeal an appraisal effectively, you need to understand why it came in low. Was it a lack of comparable sales (comps) in the area? Did the appraiser miss some of your home's upgrades or unique features? Or, as seen in some cases, was there a simple human error? Knowing the 'why' will shape your 'how' when it comes to the appeal.
The Art of the Rebuttal
The official term for an appraisal appeal is a 'Reconsideration of Value'. To get this ball rolling, you or your real estate agent will need to provide evidence that the appraisal was flawed. This evidence could include recent comps that were overlooked, proof of improvements and their value, or errors in the appraisal report. Be as specific as possible. Phrases like "I just feel it's worth more" won't cut it here; this is about hard data and unemotional facts.
The Power of Documentation
In your appeal, documents are your new best friends. If you have receipts for recent improvements, get them in order. If there are comps that show higher sales prices for similar homes, highlight them. Any documentation that supports your claim that the appraisal should be higher is essential. Think of it like preparing for the most grown-up show-and-tell of your life.
Talk it Out
Sometimes a little communication goes a long way. In some cases, you can discuss the appraisal with the appraiser directly. If it’s a matter of overlooked information, a simple conversation might lead to a revision without a formal appeal. It's worth a shot!
Timing is Everything
Time is of the essence when appealing an appraisal. There are often tight deadlines to contest the valuation, so check in with your lender to find out the window of opportunity. Treat it like a limited-time offer that you don’t want to miss.
The Lender's Role
Remember, the lender is the one who ordered the appraisal in the first place, and they have a vested interest in the loan closing. They don't want the deal to fall through any more than you do. Engage them in the process and see if they can offer assistance or advice on the appeal.
Plan B: The Second Appraisal
If the appeal doesn't go your way, you may have the option to seek a second appraisal. This isn't always an option, and it can be a bit of a gamble, but if you truly believe the first appraisal was off-base, it may be worth discussing with your lender.
Manage Expectations
While appeals can be successful, they don't guarantee a higher valuation. It's important to be prepared for all outcomes and have a plan. If you’re a buyer, this could mean renegotiating the purchase price or coming up with additional cash. If you’re a seller, you may have to adjust your expectations or find a buyer who is willing to pay out of pocket above the appraised value.
It's Not Over 'Til It's Over
A low appraisal can feel like a punch in the gut, but it’s not a knockout blow. With the right approach and a bit of persistence, you can fight back. And who knows? With a strong appeal, the second round could be a total win for your home's value.
Remember, in the world of real estate, few things are set in stone, and the appraisal is just one part of a larger picture. Keep calm, collect your evidence, and present your case. Who knows? That low number might just be a hiccup in the road on the way to your real estate success story. Happy appealing!
If you need help navigating a low appraisal or have questions about the mortgage process, we're here to assist you.
Contact us today to speak with an expert and get the guidance you need to make informed decisions about your home. Let's turn that low appraisal into a win together.