How do you handle appraisal revisions and are they really that successful?

Question

I am curious to know how other lenders/brokers handle this? Lately it seems like the appraiser will find every little excuse not to change value. And if they do, it's only a couple of grand.

Brandon Croucier · Answer

90% fail rate, its a waste of time from what I have discovered.

Izaiah Barba · Answer

Hey Erik, we’ve pushed back on a few low appraisals over the years, and I’d say the success rate is low unless there’s a clear comp that was missed or an obvious factual error. Even then, it’s usually a small adjustment like you said, maybe a couple grand.What’s helped us the most is getting ahead of it. We now prep a comp package and scope of work and leave it at the property for the appraiser during their visit. That doesn’t guarantee anything, but it helps frame the value in a way they can’t ignore.

Will Cook · Answer

After I thought I had better replacement comps (similar size, age, 0.5 mi away sold 4 mos ago) vs. appraiser choosing a 1-year old comp and 1.5 mi away and losing I don't encourage it. It's their professional opinion over yours. In this last case, appraiser said interior upgrades of the home we wanted to use were superior to the subject. Well, the appraiser didn't know the borrower actually did the home staging for that property. She said there's not a huge difference ($300K) between hers and that one.  Many times the homeowner places more value on their home than the appraiser.  I understand you never know until you try, just like making a solid offer to buy, yet for over a decade all reconsideration of value (ROV) requests just end up wasting 3-5 days.

Doug Smith · Answer

We've rarely had success appealing...sometimes...but rarely. We also own a realty business, so we have access to the MLS. We'll usually prep comps and have someone meet the appraiser at the property with those comps as well as a list of upgrades, roof age, HVAC age, etc. I've found we get farther by humbly pitching our case up front as opposed to waiting until the appraiser presents their findings. I've found appraisers don't like to look bad and they will fight tooth and nail not to change their appraisal.

Quinton Brown · Answer

I am an appraiser, been an appraiser for over 10 years.. I have never revised a value from a reconsideration of value..

Patrick Roberts · Answer

The only time I've seen appraisal challenges be successful is when the appraiser missed a comp that would have a significant affect on the outcome, as in a glaring and obvious impact. With the current environment and all of the lending fraud reports and turning markets, I have seen appraisers get conservative in the past 6 months. I dont blame them, either.

How do you handle appraisal revisions and are they really that successful?

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