We can’t get a mortgage on the home we want, because the appraisal was lower than we expected. Is there anything you can do to help?
It is possible to fight back against lowball home appraisals and your licensed real estate agent can help. The first step would be to examine the appraisal for errors, then check the appraiser’s choices for comparable properties.
* We look for simple errors, such as in the number of square feet in the home and the number of bedrooms and baths.
* Sometimes the appraisal is based on older homes a few blocks away that are not directly comparable.
Such experiences are not uncommon right now. According to the National Association of Realtors, about one-third of real-estate agents report that lowball appraisals have resulted in cancelled deals, delayed or renegotiated deals.
* We check to see if the appraisal included distressed sales or foreclosures, which tend to bring down the actual value of the home being appraised, according to the Mortgage Bankers Association.
* In some cases, an appraiser can be convinced to search further for comparable properties. If there haven’t been many sales in the neighborhood, it’s more difficult to find equally valued properties to support an appraisal. Have your real estate agent talk to the appraiser to see if he or she will make a greater effort to find comparables.
* Borrowers can’t pick their appraiser, but they can accompany him or her and provide a list of improvements and features in the home that add value.
Borrowers who are unhappy with their property valuation can ask to have the appraisal reviewed by the bank. If the bank agrees it wasn’t realistic, it will order a new one. But the bank has to have a good reason for the second appraisal, and the buyer has to pay for it, usually about $400.
Finding a lender is like shopping. Always check at least 3 different lenders. You would not buy pants without trying them on, so try on your lender.