Can I dispute an appraisal?

21 Replies

Hey everyone,

I’m a newbie real estate investor. I purchased my first home in May of this year at the purchase price of 239K. We renovated extensively for a total cost of 45K so purchase price plus renovation cost is 284K. I just had it reappraised and the new value came in at 294K.

I found some discrepancies in the appraisal report, one being that they seemed to have not listed my 800 sqft detached garage as an amenity, the other being that they listed the closest comp as a two bathroom house when it is really just a one bathroom.

I really need the appraisal to be about 30K more in order for me to be able to pull out some equity for the down payment on my next house.

I don’t want to wait another year for another appraisal. Is there any way to dispute the results of the appraisal?

Thanks in advance!

@Asa Davis there is if you have merit, the comp with 1 bathroom is something but that isn't going to get you far.  However a detached garage isn't really an amenity, attached is preferable, unless this is in addition to an attached garage.  I don't see a way that you'll get an extra $30k out of an appraisal with the info you've provided.  I do have a suggestion if this is in Nashville and you think you can get the extra $30k though.

@Asa Davis request offers from some of the iBuyers if they are similar to the appraisal it may be time to accept the appraisal if they are in the >$30k range you can ask them about the comps they used, so you can bring them to the appraiser.

And that is why you always want to make sure your comps are solid.  Always have a backup in case your appraisal falls short.  I think even with those discrepancies you won't be anywhere near 30k more.  A detached garage is not an amenity. It's not the end of the world though.  I know of a few people that ended up renting their flips out for a few years to help recover some of those costs.  It's not ideal to have all that money tied up in one property, but you do what you have to do.

It's your first one and even the pro's make mistakes.  Don't beat yourself up too much over it.  There will be many more opportunities for you in the future.

@Asa Davis

1. Ask the Apraiser to adjust findings based on your info. Most don’t like to be told their wrong. Just saying that from my previous 3 disputes experiences.

2. If your not happy with a result hire independent and don’t tell them Anout your dispute. Reason being is networking.

3. Still not happy write a letter to state board of Appraiser’s.

4. Good luck.

You got my blood boiling this morning. Thanks for the bad memories. Guess I need to get out of bed. Lol just kidding.

Don't think that a detached garage will get you 30k. I'm not an appraiser but based on some appraisals I've seen, you're looking at about half that.

My recommendation would be to really dissect the appraisal, if you dont know how then get with someone who does. Make sure they're comparing apples to apples - the condition of subject vs the comps not just the square footage or bed and bath count. Be sure to drive the comps as well to get a better feel for the comps and areas.

Good luck!!

@Asa Davis I'm a bit late.

Yes you can dispute an appraisal. Not really with the appraiser but more so with the lender.

An investor of mine just did that in Inglewood. Got an appraisal back at 245k after buying the house for 266 and putting 100 into it. He disputed it with the lender bc the comps were complete garbage. Second appraisal came back at 485 which is what the bank will be using. 

@Aaron K.

Inglewood in Nashville TN. I honestly don't know. The comps were not even close. I can't really explain how wrong the comps were when I looked at them. 

@Luka Milicevic

If someone does a cash out refinance, can we ask for an appraisal before the first one is finished? So let’s say the lender orders an appraisal, can we get our own as well and ask for the higher amount at the same time? Or is it more common to wait for the appraisal to come back and dispute it then? My thinking is that I’d rather pay a few hundred dollars at the beginning to get an extra appraisal and not risk delaying a cash out refi.

I had this issue a while back, had an appraisal off by like $25k.  Tried to dispute it but didn't really get anywhere, the comps selected didn't really make any sense.  However, on the flip side, I've had appraisals come back way higher than I thought they should have.  In general they're just a crap shoot and most of the time not an accurate representation of the actual value of the property unless you've got some type of neighborhood where all the houses are the same (with lots of comps).  In fact with all the appraisals I've done, only one actually came back with what I felt was the actual value (within 10%).  All the rest were 15% higher or lower than what I actually thought it should be.  When they get into areas where the comps are sparse or all the property varies wildly, their estimates just aren't great most of the time.

Never had this problem. I think you may need take the loss and learn to purchase better deals. Sounds like you may have leaned on MLM and realtors advise. Don't stress. Just learn from the mistakes, and you will be doing great. 

For flips, try purchasing from drug addicts (off market) that are selling there elderly or deceased parents home to raise drug money. Give them a cash deposit for a contract. We are a nation of selfishness. understand the culture and take action. 

If you happen to take this advise, I would love to meet up and hear about your successes while shooting tequila  and smoking Cubans on the white sands of the Mexican Caribbean.   

Shawn Coverdell

Homes in the Hood

@Asa Davis

I’m an appraiser in the Texas Area. Of course Im not familiar with your market but I’d be glad to look over the appraisal and who knows maybe provide something useful. For example, is it credible, well supported, etc.

As a lender, I have seen plenty of borrowers disappointed with their appraisal. This is why we use a small select group of AMCs, usually Appraisal Nation, who have a dispute resolution criteria. It's a single page dispute form and gives you the opportunity to detail what the appraiser missed or why exactly your comps (listed) should be used and not the ones the appraisers used or whatever. 

We can therefore just give a borrower who wishes to dispute an appraisal; Appraisal Nation's phone number and say "Here's their phone number, work it out with them".

As a lender we dont want to get involved in a third party's appraisal. Both for impartiality's sake and also because it's a waste of our time that could be used to, you know, actually lend mortgages. 

@Tadeh Vartanian

Sorry for late reply. You can order your own appraisal for your records. The bank isn't going to use it though. They are going to use whatever appraisal they order.