Seven Tips for Dealing With the Dreaded Appraisal

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Appraisals are a part of real estate investing, especially if you or your buyer needs bank financing.  Appraisals can be crucial – they can easily make or break the deal.

Several years ago banks, when ordering an appraisal, could often select the appraiser they wanted to do the job.  This often ensured that the appraiser knew both the customer and the market they were working in.  Unfortunately, it also let a few bad apples inflate prices and be less than honest with the appraisal.

Today when a bank orders an appraisal the request goes into a pool and the next name on the list gets the job;  there is really no more say in who will get the job.  So while this may have cut down on fraud, it has definitely increased the chances of getting an appraiser that does not know you, what you do, their job or the market.  They could even be from the next town over and never have stepped foot in your neighborhood.  While many may think this will translate into a fair and honest appraisal (sometimes it does), my experience has demonstrated that the lack of local knowledge is detrimental.

Related: BP Podcast 007: Making Appraisals Work For You with Ryan Lundquist

So even though you have done your homework, found and developed a good real estate deal, understand that you can be left to the luck of the draw when it comes to an appraisal.  There are however some things that you can and should do to help achieve a favorable outcome.

  1. Show Up! – It does not matter if you are buying or selling – you need to show up to the appraisal and meet the appraiser.  Be nice, friendly and helpful.  Build a rapport if you can, and be there to answer questions and point out the good aspects of the property.  The simple act of being there can go a long way.
  2. Bring Some Comps – Bring what you think are the fair market comparables for your property and give them to the appraiser.  Most appraisers will look up and use their own comps but there is no reason not to help them along a little.  They are human, and they may honestly overlook or be unaware of a very good comp.
  3. Bring Repair Estimates – If the property is going to be rehabbed, bring a list of the planned repairs and their associated cost estimates.  This will help the appraiser develop the after repair value.
  4. Bring a List of Upgrades – If the property has already been rehabbed, bring a list of the upgrades that have been done and the cost of those upgrades.
  5. Bring a List of Income and Expenses – If the property is an investment property, a list of potential income and expenses will help the appraiser develop an investment value.  Do this even for a single family home you plan to use a rental property.
  6. Get the Property Looking Good – Make sure the property looks as goods as you can.  If it is your property, this is an obvious step.  But even if it is not your property yet, picking up some trash, for example, is not the worst thing to do and it can help.
  7. Schedule the Appraisal When No One is Home – If the property is an occupied rental property, try to schedule the appraisal when the tenants are away.  Tenants can be loose cannons, it is best if they are not around.

Appraisals have become more of a challenge in recent years due to changes in the way they are ordered.  You can, however, help to ensure a more favorable outcome for your values by following the tips listed above. Honestly, though, if your appraiser has had a bad day or just does not know what they are doing nothing will help you and you are going to have to fight that fight later on.  But that is a subject for another post.

Let us know your tips of working with appraisers with your comments.

About Author

Kevin Perk

Kevin Perk is co-founder of Kevron Properties, LLC with his wife Terron and has been involved in real estate investing for 10 years. Kevin invests in and manages rental properties in Memphis, TN and is a past president and vice-president of the local REIA group, the Memphis Investors Group.


  1. We have a flip under contract and the conventional appraisal came in at 225k. Contract price 249k. The appraiser used comps from October and September of last year and our market has gone up 14% in the last year. He claims it is a stable market. We challenged it and sent him 5 comps and he wouldn’t reconsider.

  2. We ran into the EXACT same scenario Mark. Listed AND SOLD a property in 8hrs for $259k, bone head appraiser came back at $225k pulling comps from a different neighborhood. Buyer/buyers realtor knew it was bogus but the appraiser for WELLS FARGO wouldn’t hear any of it. The buyer was an executive for Wells Fargo and STILL couldn’t get it pushed through. The buyer ended up putting more money down and we dropped the price to $251k.

    We have a similar situation, coming up with another property. We put in the remarks NO WELLS FARGO/BofA. The market is moving fast, hopefully I can use some of these tips to hit our appraisal.

  3. Kevin, I agree with your premise and your list of “action steps.” I would add to that list “bring (copies of) receipts and perhaps even a one page summary of the work completed.

    Still, the appraiser’s reputation is on the line with the appraisal report that he/she signs. The appraiser will view the information that you provide with some skepticism. Still it does not hurt to provide the appraiser with the information and make his/her job a little easier.

    • Kevin Perk



      But it is best to provide it. And it is best to provide all the evidence you can to support your case. Some will use it, some will not. If you have been in the business for a while like we have I find some appraisers tend to “agree” a bit more with what we show them.

      But you are correct, anything you can do to make the job easier is well worth the effort.

      Thanks for reading and commenting,


  4. Jeff Brown

    In my experience there are a couple problems with appraisals in today’s market. One is ongoing and will likely never disappear. The other will go away with time.

    First, most appraisers simply don’t like being told they’re wrong, or that they don’t quite know how to do their job. It matters not that they’re sometimes so wrong they can’t tell which way is north on the map. They have the last word, and that’s pretty much it with rare exception. The good ones welcome any help they can get from the broker/agent in terms of comps and other pertinent info. The same ones who get their panties in a bunch though, get much of their ‘pay’ by ignoring empirical evidence showing they might be mistaken.

    Second, when we endure the sorta problems we just had with the bursting bubble, bad loans, and the like, the pendulum swings to the other extreme attempting to correct course. This is exactly what we’re facing now. Some of the currently unreasonable rules imposed to ‘fix’ recent problems will be modified, though when is anybody’s guess.

    In the last year we’ve successfully lobbied for the removal of two appraisers from the pool in a couple markets. What they did was egregious in both cases and reversed by reasonable pros. The takeaway is that this too shall pass.

    • Kevin Perk


      No one likes to be told they are wrong, but sometimes they just are. That is where knowing what a good deal is and knowing your market come into play. Sometimes you are just going to have to challenge the appraisal with your comps and your data.

      Problem is, the bank is in a pickle now. How does the bank explain in an audit why they threw the appraisal out? Even if they know it was bad throwing it out still makes the auditors frown. Still sometimes it works to weed the bad ones out like you say. I have had some success here as well. Demonstrating how far off an appraisal was and getting the appraiser to re-evaluate and actually increase their valuation. But you have to fight and be persistent.

      Hopefully you are right that all of this too shall pass.

      Thanks for reading and sharing your experiences,


  5. As an appraiser I agree with the tips. Do them. Often times the appraisal part of the transaction is treated with far less care than it should be. It may also be worth considering using lenders who have a smaller pool of local appraisers who really understand the market. Some of my best lender clients tend to do business like this so they can establish relationships with a specific group of appraisers instead of using an appraisal ordering system that chooses a random appraiser off of an enormous list. Some companies send out “blast orders” too where they email a large group of appraisers and simply give the order to whoever clicks on it first. The fees are usually MUCH lower than they should be too. I don’t do business with companies like that, but if your lender uses this system, be careful. You get what you pay for.

    • Kevin Perk


      Thanks for the comments. Good to hear from an appraiser in this thread.

      You are correct that smaller lenders ofter have a bit more “flexibility” with appraisers. Plus you may have a relationship with a banker that will be advantageous to you if an appraisal goes south. IN other words, you can actually get someone on the phone and talk to them about what is going on and they will listen!

      And you are so correct that you get what you pay for,

      Thanks again,


  6. Mark,

    Part of the problem you have Mark is that you said “flip”. You did not indicate what you paid for the property, and what upgrades you did. Additionally because a larger market went up 14% in a year does not mean this specific property did. Appraisers are hired to estimate “market value” for lenders, not “investment value”. I cannot speak to the “comps” that were used because I do not know your market. If there are more recent “sales” , or “pending sales” than provide them to the appraiser. There is also a general misunderstanding among investors of what a comp is. As an appraiser and an investor I can see both sides of the argument. Also folks regarding cost it does not equate to value. Often the “contributory value” of an improvement may equal cost but it is not a rule that it does.

    Adam Weber, MAI, SRA, MRICS

    • Kevin Perk


      Thanks for writing and helping out here. You have raised some good points. Know your comps. Let the appraiser know about your comps. Know what a true investment deal is in your market. Like you said adding $10,000 of improvements certainly will improve the value, but maybe not as much as you think.

      Thanks again,


  7. I have a very jaded view of appraisals and feel fairly helpless to control them. Most of the appraisals that I have had done were questionable at best and (should be) criminal at worst.

    1st Appraisal trying to buy first home in 2009: Appraisal came in $35k below agreed price with terrible comps. We pointed out errors but loan officer refused to budge and advised us to just pay the difference in cash and buy PMI since we had 20% down based no agreed price. We ended up having to change lenders in order to get a second appraisal. Loan officer ended up getting fired for inappropriately advising us. New appraisal came in $5k above asking and we got the house. Yay!

    2nd appraisal was for a Refi. I am in NH and our market really has not gone down as part of the bubble. Appraisal came in at EXACTLY the town’s assessed value, 10% loss in value and we had to purchase PMI to refi. Not necessarily a scandalous appraisal, but I disagreed with the comps and to me it was obvious that the appraiser pulled the town’s assessment and then worked backwards.

    And finally, first investment property and the appraisal came in at EXACTLY the agreed sale price of $133k. They didn’t even try to hide that they were working backwards to get the answer that they were looking for. It just struck me as absurd that they could come in at exactly the sale price, which is an odd number with a straight face.

    • Adam, the $133K could have been an example where the appraiser was trying to “hit the number” so to speak, but it could very well be the appraiser agreeing that the sales price was a reasonable representation of vale. For instance, if there was a range of values in the neighborhood between $130-136K, if $133K looks good, it’s entirely legit for the appraiser to simply reconcile value to the contract price. The appraiser might say something like, “the sales price falls within the range of values indicated by comparable sales in this report and is a good representation of market value.”

  8. Jeff,

    one thing that most people fail to realize is that the appraisal is done for the benefit of the lender (ie. the bank) not the buyer even though they pay for it. The appraiser should be open to any useful information that the involved parties bring to them, but, as has been stated before, they usually view this with some skepticism. The seller of the property as well as any potential buyer might have any number of reasons specific to them for purchasing a property, sometimes at an inflated price. It is the job of the appraiser to develop an opinion of value based on what a “typical buyer”, not a specific buyer would pay for a property. Just because you have a contract in hand does not mean that a property is worth the same to a “typical buyer”. Contracts fall through all the time at the last minute, and quite a few times (that I have personally seen during my 16+ years appraising) a bogus contract is presented to the appraiser. Appraisers typically will never admit to having a wrong value due to a number of reasons, chief among them that they would open themselves up to all sorts of liabilities if they did. Most appraisers will admit to (and should correct any errors or omissions which resulted in a erroneous valuation), but will not say they made a mistake in their comp selection or reasoning, as they would very likely lose their license as soon as you or the bank filed a complaint with the State Appraisal Board. It is much harder to provide a credible defense against a claim that you have already admitted you guilt to. In defense of my profession, appraisers typically get a bad rap for just doing their job. There is still tremendous pressure on them from all parties involved, and when someone’s deal falls through, they typically will lash out at the most obvious target, the appraiser. Another thing that I see quite often is that bankers and loan officers will blame the appraisal as the reason for the failure for the loan, when in reality they had no intention of making the loan in the first place. I see this especially in the commercial side all the time. Another point to consider is that the appraiser oftentimes has to follow supplemental standards put forth by the bank. These standards can have the effect of limiting the selection of comparable sales due to any number of reasons. I personally don’t like many of the stipulations put on us by lenders, but they are the ones ultimately lending the money so they make the rules. Sometimes your best bet is to just go with another lender if possible, rather than deal with a difficult one.

    Tom T. Hall

    • Jeff Brown

      Hey Tom — Not entirely sure you’re talking to me, but like your points. I’d like to address two of them.

      1. “Sometimes the bank never intended to make the loan.” Been watchin’ that dance since Nixon was in office. You nailed it.

      2. One specific buyer vs ‘typical’ buyer. We agree there too. However, when the new regs disallow a relatively recent coupla dozen ‘typical’ buyer closed sales, clones of the subject property, I tend to get uppity. 🙂

      • Kevin Perk


        Appraisers can provide a way for the banks to save face by pointing to a low appraisal. I just wish the banks would be upfront with me in the beginning. I can take “no” for an answer and move on.

        Thanks again for helping here with your comments,


    • Chris K.

      Hi Tom,

      This is an old thread so I’m not sure if you’ll get this, but if you do I could use your advice.

      I have a duplex under contract and the appraisal is coming up quick. The property is a short-sale in fairly good condition. My realtor and I both calculated comps in the $155k range but in the bidding war, we ended up hitting $165k, which is still going to put me in good-deal territory. I am concerned about the appraisal coming in far below the number I need to successfully finance the deal. I’m a veteran and utilizing my VA mortgage benefit to make this purchase, so I don’t have the flexibility that some other investors do.
      Assuming that I prepare thoroughly for the initial appraisal (as described in Kevin’s post) and it still comes in low, the question becomes: What specific guidance can you provide for appealing the appraisal? As an insider what can you recommend we investors do to ensure that a good deal isn’t lost due to the appraisal working against us?
      Thanks for your time and help — your expertise is appreciated.

      • Hi Chris. As for specific advice regarding appealing the appraisal, all I can tell you is that you have the right to review any information or documentation that the lender used to determine their estimate of value. That includes BPOs, CMAs, tax values, even old appraisals. I believe you are given several days before closing to review these items if you request them. If the appraisal comes in too low, you can always request another appraisal, at your expense though. If your property (the duplex) is being purchased for income purposes, then make sure that the Income Capitalization approach was performed and at least considered. Oftentimes only the sales comparison approach is performed. If you need to knock down a bad appraisal, have your appraiser perform a discounted cash flow analysis based in current comparable market rents and actual expenses, and a Band of Investment analysis using current lending terms (ie. the same ones given to you by the lender), to calculate your cap rate. Divide the estimated Net Operating Income by your estimated Cap Rate to arrive at your value. If your new value is more, then you might have something to challenge the appraisal. If after reviewing any of the Banks documents you see that the value might be lower, it might be best to try another lender. Don’t let them string you along for months with “let me try something else”. Move on to another lender. You might have to pay more interest, or even more upfront, but at least you won’t let a good deal, if it truly is one, slip by. I hope this helps. – Tom

  9. WOW, great article and just in time for my newest property to hit the market. I was starting to believe this was a problem only in Texas. So what a relief to see everyone else is dealing with the same issues. I was lucky when I purchased this property because the bank holding the foreclosure fought the appraisal and we got it raised before closing. Now I know the battle will begin again, but with your list I am going to go in armed with paperwork! Thanks for the great advice. For only being a member for a week or so I have learned so much. One question though, are you allowed to be at the appraisal when you are selling. Banks have never let me know when an appraisal is being done.

    • Kevin Perk


      Thanks for the kind words and I am glad you found the Bigger Pockets site.

      I assume since you are selling that it is your property. If it is, of course you have every right to be there. Demand to know when someone will be on your property. GO!


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