What do you do when appraisal comes in low?

Question

With the low interest rates and low inventory, it seems like a great market to sell or refinance, but appraisals can be gravel in the gears. What do you do when an appraisal comes in low, if the home is hard to find comps for, if you get an appraiser who doesn't take much care, if the market is just hotter than an appraiser's opinion?

Joseph Firmin · Answer

Come prepared to the appraisal, do your own analysis, run your comps, have a list of all improvements and the costs associated. Provide these to the appraiser. Make sure they know you're in a position to dispute (without saying it of course) a low appraisal that isn't substantiated.

Matthew Irish-Jones · Answer

@Amelia G you can challenge an appraiser and win if you have better comps.  I have done it.

Tucker Cummings · Answer

As the previous two stated, I had experience this past year when we flipped and refinanced our primary. Appraiser told me just by looking at comps he was thinking our house was worth about 262k. I showed him comps, the improvements we made and "before pictures" of our house. I also said, "I know you've been doing this a long time and you probably have your way of appraising and doing things. But if you don't mind, I'd appreciate if you took a look at this packet I put together and what I think the property should appraise for."

Appraisal came back at 277k

Amelia G · Answer

Thanks. All great advice. But, if all that has been tried, do you change lenders? If the lender is unable to override the appraiser, but the appraiser seems wrong, incompetent or biased, do you file a complaint? What are reasonable and effective next steps?

When it is a sale situation and the difference is not extreme, then it is not incompetence, just a difference of opinion and Buyer and Seller can just split the difference. But what to do in more extreme circumstances or in a refi situation?

What do you do when appraisal comes in low?

Most Popular Reply