According to The National Association of REALTORS®, 16%
of real estate professionals surveyed in June reported that they had at least one cancellation of a sale, usually due to a large number of low appraisals. After the housing market crash, real estate agents, buyers, and sellers have alike noticed a change in the quality and method of home appraisals.
The biggest problem, according to real estate professionals, is that appraisals are coming in way below the accepted offer. When a low appraisal comes in, the easiest thing a buyer can do is ask the seller to accept a lower price that reflects the appraised value of the home. However, most sellers will not agree to such a request. When you find yourself in this position, RISMedia offers the following tips:
Do some research on the appraiser and the conditions of the appraisal. You have the right to a copy of the appraisal and to information about the appraiser and the comparables used in the appraisal. So, for example, if the appraiser was from out of town or was unfamiliar with your area, you have the right to request a new appraisal. Additionally, if you feel that the comparable used for the appraisal are really not comparable, you can request a new appraisal.
The next step is to request a new appraisal by talking to the lender. You will present an argument (as to why you think a new appraisal is necessary) to the lender, and the lender will decide to either override the appraisal (unlikely), order a new appraisal be made (more likely), or dismiss your request.
You also have the option to order your own appraisal from an independent. RISMedia recommends asking your lender for a list of approved appraisers if your loan is an FHA loan. Once you have an independent appraisal done, you should give the appraisal to your lender for review. The original appraiser has the right to agree with, dispute, or reject the second appraisal. In the case of a dispute, the bank may request that a third appraisal be conducted or the original appraiser may adjust their appraisal.
For more information on fighting low appraisals, check out this article.
If you are looking to dive into the housing market this year, contact The Brandt Group with RE/MAX Affiliates! We would love to help you find your dream home and move in, super fast.
Let us know how we can help!
Brad and Rob Brandt
The Brandt Group
Direct: (740) 272-0038