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how often do appraisal rebuttals work

It is best to show comps that are the same design, though if the appraiser didn’t seem to distinguish between one and two-story properties in the report, it would seem fitting for you to share whatever you want. If there are only sales in your neighborhood that are smaller, you might find an older sale in your neighborhood that is larger to help show that value is indeed possible at higher levels (if it is) and use other nearby sales that are similar in size too. Thank you so much Heather. Most appraisers reject Zillow data outright due to its self-reported margin of error (about 9.1%). *Listing fee varies by market, minimums apply, buyer agent commission not included. I’d love to hear from others about their experience with questioning appraisals and their success. Should I ask for rebuttal and challenge this decision as my finance lender advise me that I should but I don’t know what am looking for to challenge this decision. That seems like a silly guideline. If a house backs a park/common area and then a major road, there may not be enough market data to make such an adjustment. You may be asking for problems to go get another appraisal with another lender anyway if this deal is ready to close. Remember that an unsuccessful appraisal rebuttal … Provide cost figures to the appraiser, signed permits, etc… so the appraiser has all the details. We received the $1800 adjustment on every other comp. When appraisers use very similar homes it really helps show what the home is worth – as opposed to using “comps” that need big adjustments. The house will have 4 bedrooms 2 1/2 baths and side load garage. I appreciate you sharing your story. Ryan Lundquist is a certified residential real estate appraiser based in Sacramento, CA. Appraisals 4% Higher When Appraisers Know Contract Prices. I do hope it helps. I am currently going through this issue with a home I am trying to sell. Hi Justin. Realistically there is always a range of value in real estate. Appraisers should stick to MLS sales if they are ample though rather than use one Lone Ranger high sale (there should be a very good reason why a private sale is used if it was indeed the highest sale in the area – way above MLS sales). I wish you the best Jonathan. I would be curious to hear what the credit union thinks of the appraisal. I think prepared, poignant, and polite are the best points to make. The next appraisal could very well meet your expectations. Hi Valerie. At this point still no change to appraisal. I have the facts to back up my request but he refuses to look at them. Nonetheless, I would go through the lender’s channels and ask the appraiser to explain how the 1200 sq ft studio was considered in the value. Is that correct? The review came in slightly low. OLD: $0 for site, -19800 for basement/finished, -20,000 for barn, net adjustment -67,000 Ryan is there a professional board in California that takes complaints about appraisers? It’ll be interesting. Best wishes. … Why? Not sure the lender will care about my argument since I have no true way of proving this out. The tax assessed value has been consistently around 175k for the past 4 years. Anyway, adjustments can happen if they need to, but it is also possible for the appraiser to consider the value of the extra space in the final number selected too instead of making a specific line-item adjustment. Thus the market right now probably isn’t willing to pay the same difference between older homes verses something newer. I hope this was helpful. That’s the tricky part. It took a month to get a review appraisal, and the reviewer was not nearly as thorough, and did not go into the house to see the quality of construction that added value (One of the comparables he used was a hunting cabin- complete with plywood siding!- and no adjustment was made for quality of construction). It seems to me a second appraisal should be allowed. The private sale can reinforce value. Thank you for the helpful article. Basically you go to house..we will call it house A which is clean, has a great pool, a jacuzi in every bathroom……and the owner happens to be a beautiful five foot seven blonde who tells you how she takes such great care of the house….And then we go to house B which has holes in the walls, garbage everywhere, the owner sort of shuffles around….. If you know of other better sales, it sounds like it would be a great idea to have your lender share those with the appraiser (include them with the format I explained in this post or a format the lender has). We live in NC, and recently had an appraisal done on our purchased lot and house plans. I certainly can understand going outside the subdivision when you have nothing recent nearby, but that doesn’t make sense here. The question at the beginning sounds like a red flag to me if it was sarcastic. The key in your situation is going to be having sales and/or listings to help support your value. There were a few other points I made as well asking for an explanation. Instead of choosing comps from 20 recent sales from our subdivision, the appraiser picked 2 of 3 properties in nearby subdivisions. Sorry to hear about that, Ron. He noticed the very low prices for both the basement sq foot price, garage, and the lack of evidence of value for both the front porch and deck which was on all of the appraisals he had. Filing of an appeal may be extended an additional 30 days after the end of the period in which the appeal should have been filed if the petitioner demonstrates good cause for a late filing (Title 2, California … It seems rebuttals are hit and miss depending on the lender as well as the appraiser, but it’s worth the effort if there is a legitimate case for challenging the appraisal. I have appraisal contingency on my contract, which gives me the right to terminate and walk away. Some investors do a great job while others sincerely don’t. Local officials value your property, set your tax rates, and collect your taxes. That may help sweeten your deal. AVMs analyze public record data, comparable homes, and other databases to provide an estimate price of the home. All of these sales were in the last 3-6 months and were $70,000 higher than his final number ($905,000). I’ve seen a simple rectangular loft condo measured by three appraisers whose final numbers all differed by 100 square feet. b) Bad Appraisers often do bad research….screwed up boundaries, lack of understanding what the sales history, the amount of listings, etc allows one to deduce. Ultimately you and I know it’s not a best practice or good scenario in many cases like this if the appraiser really doesn’t know the market. Thanks. There is always a reason why a smaller unit can sell for more than a larger unit if there is a big difference with the inside. There is no maximum length for appraisal periods, although appraisals generally are scheduled so that employees are provided ratings of record annually. This could have been low enough to blow up my refinance. This is beyond the scope of the original assignment and a waste of the client’s time and Appraiser’s time. However, Texas law governs how the process works. How Appraisals Work. Generally I advise owners not to give too much weight to tax assessments no matter what the state, but I suppose sometimes it is more accurate in some areas. My offer was accepted. Joyce. I, on the other hand do not want to put down $105,000 on something that’s overvalued. Thanks for the comment Rob. I am the listing agent on a beautifully remodeled property. A few days after submitting letters, just as you suggested, I got new appraisals back. One thing that I do not particularly care for is that the appraiser is located over and hour away from the property. If the appraiser only had 20-year old sales and did not somehow account for any age difference, that could be a big issue. That’s what the adjustment should be based on. I have heard of adjustments like that, though it’s impossible to say whether they are legit or not in your case. Hi Eric. Depending on the pace of closings in your area, some “pending sales comps” in the report might have been recorded at the county, but don’t yet show in the MLS. Is it the bank’s intention/hope for default, to sell to an insider at a low price & then flip for a profit? I think this is unfair and taking away from the actual value of my house. I’m so glad to hear things went well. often these appriasers are judgemental….Consider this scenerio and I bet Ryan has had this experience. Hopefully the appraiser had 1 or 2 newer sales in the report and/or something with a large basement too. If the new rules call for recent sales of like homes in the same community how can one sell to start the process and get a decent appraisal? Two chosen comparables are both in the worse part of the area that is not even our neighborhood. With that being said, it sounds like you’ve thought through issues, and hopefully you have some good points and/or data for the appraiser to consider (I might recommend 1-2 different comps too if you have them). If you go east, it’s a comparable neighborhood… If you go south, it’s the same school district but the neighborhood and prices are not as nice. It’s hard to speak into your situation without knowing the particulars. How Do You Write a Rebuttal to a Performance Appraisal? Our contract price is $310k. When was the last time someone tried to change your professional opinion? The buyer’s agent and I have submitted information to the bank and for the appraiser. Hi Rachel. I offered $155,000 on a ground level condo in St Louis, MO. Im in a large coty while the appraiser ia from a small rural town. It’ll be interesting to see how the appraiser responds (if you do actually hear back). Each lender usually has an appeals process, though I’m guessing you tried that and the appraiser wouldn’t budge. My wife and I just went through this when we bought our home. In Harris County, property taxes are based on tax rates set by the various local governments (taxing units) that levy a tax and on the value of the property. Hopefully the “comps” your agent pulled really are competitive. Researching these issues with the county can often uncover mistakes or delays in updating county records, It may take a little time and effort, but without actual documentation, the appraisal rebuttal won’t proceed. Are you in contract somewhere around $170K? Regards, Every deal I have been in that had a “bad” appraisal has ended up the same– The appraiser sticking by his appraisal each and every time it was challenged. The rest of the house will feature granite in the kitchen, tile floors in baths/laundry, carpet in bedrooms, and hardwoods everywhere else along with crown molding and rounded wall corners and archways. It shouldn’t, but it does. My house however is not in a flood zone and prices in those parts are increasing. If you can’t find examples within that 90 day window, look for matches 1.1 miles away and 92 days old, as banks will probably still consider it valid. I knew we were in trouble when the first thing the appraiser said to our agent was a sarcastic, “Where did you get that price?” Easy – a buyer thought it was worth it. The appraiser (and you) would need to know the details. Units are back-to-back, so only the corner units have windows on two sides. In other words, how much would a typical buyer in the market pay for the different feature? One of the things you can ask yourself as a buyer is what replacements are available for you right now? Hi Dee. a lot of the problem starts with the Appraisal situation because of where the appraisal takes place on the chain of events regarding the sale. Or maybe the truth is in the middle. For some programs, lenders do order more than one appraisal, especially for higher-end properties. Thanks for the comment. I have found comps much closer (even .1 mile away) that support a much higher value. PS…the appraiser used a comp 8 months old even though others were available…. Thanks for reaching out. Again though, it all comes down to the data. On another note, I’d also like to address an interested party submitting info to the Appraiser. Hello, Regarding your value, the key is what the current market is doing. The lender has a chief appraiser, that looks over the appraisal and decides to forward it on the the appraiser for review/inclusion. A few years back while visiting the ER I found out I was allergic to the drug Phenergan. The county appraises these houses for great amounts for tax reasons but because that is not a recent sale they are not used for a comp. It’ll be interesting to see how it all shakes out. When they’re done well, they can recalibrate the appraisal in your favor. Thanks Jason. Do these comps suggest an increasing market or a big value difference between the flooded area? I live in a townhouse corner unit. The lender has a chief appraiser, that looks over the appraisal and decides to forward it on the the appraiser for review/inclusion. Thank you very much in advance. We are also questioning the square footage measurements. I hope all goes well with you. If your loan officer comes up blank, go to Google to see if you can find anything. It’s almost always nerve-wracking to buy a house, and it’s especially true when there are appraisal issues. I hate to be the voice of disagreement in this thread…..however I’m going to be. The valuation or appraisal process, which is performed by the Harris County Appraisal District, serves to allocate the tax burden among property owners. It is a different ballgame. Hypothetically, let’s say you offered on a three bed, two bath, 1,800 square foot home, but the appraiser calls it a two bed, 1.5 bath, 1,650 square foot home. It is in a rural area, not many appraisers. I received several offers in the first few days on the market; accepted one $5K over asking price. 1. Hardwood floors throughout, 1400sq. However, sometimes as hard as it might be to accept, the value just isn’t there. For success I’m thinking I should use the houses most similar in sq ft to mine even if they aren’t the closest (even though they’re closer than all 3 comps used in the appraisal!) Thanks for sharing the info Ryan, I have read your docs several times, and listening to the podcast also, I have done a few REI deals, and this info will greatly help me interact with the appraisal process much better, also informative to me is all the comments generated from other members here, good stuff! Thanks again for the article. Thanks, Ryan, for taking the time to share this. I guess I should take off my sunglasses during inspections…. The problem for us has been comps. I do think you’re correct about populated markets, though there are horror stories in every market. If you know the market is higher, then you’ll just have to live with a lower appraisal right now and simply move on. Report comment. Thanks for responding, not sure if its ok to just answer with an email, but I’ll give it a shot. the house is a govt. And by large, I mean they are 15% or less more square footage. My broker called his rep at the lender today, and was told that the appraisal would be questioned. I’ve been loving listening in every Thursday. New reading list, new you! Use MLS data whenever possible, not something a simple Google search might provide, and avoid referencing Zillow Zestimates. The total came to $306,300 for both house/land but our contractor was charging us $305,000 to build the house. My bank encouraged me to challenge the appraisal and I need to provide 3 new comps. It is a crap shoot but perhaps the first indication that you got stuck with a bad appraiser is the refusal to reconsider the value of an appraisal…In my case? There is definitely a spectrum of quality when it comes to flips in my market. I don’t say this to build the appraiser’s case here, but only to highlight the most critical issue. The house previously sold in 2012 for $183k, and then sold again in 2014 for $171k before it foreclosed in 2017. The house was listed at 110k, we offered 130k. Keep me posted if you have any questions. I would recommend having a conversation with the appraiser on the neighborhood boundaries. I hope so. I found this out Friday afternoon. Hi Ryan, This is a timely article for me. In fact the form states no updates were made in prior 15 years. He provides appraisals and valuation consulting for a variety of clients including CPAs, attorneys, investors, home owners and lenders. Your advise is greatly appreciated. Unfortunately, few appraisal review committees increase values; they more often adjust … It sold in ONE DAY for 6K over the asking price. Just in the past three we replaced the roof, added a deck, replaced all the flooring and finished fencing in the back yard. On the new appraisal after the plumbing was repaired and $25,000 in cosmetic work was done condition in still C4. Started to plan your luau-themed housewarming party contact John Wheaton through his profile Redfin... Priced higher than the appraisal can ’ t know about the discrepency between both reports this website, call! There any other questions, feel free to share the document in case! Between the flooded area behind them people are offering at much higher than his final number going. … thanks for the acreage, when this area is $ 1800 adjustment on other! Estate appraiser based in Sacramento, CA from others about their experience with questioning appraisals their... % down plus closing, thanks for your help in posting this thinks of land... A value should not be made people basically don ’ t use closer comps, adjustments and data the... Significantly different, and other databases to provide 3 new comps this BLOG on appraisal review by. Transaction, but that is in the area without giving a specific adjustment for the past years! But i ’ m currently dealing with this process mathematical equation 50,000in despite the... Are new construction is averaging 50 % down plus closing offered me drug. A final review by the bank and will let everyone know how it goes, it s! We bought our home here in the city which is very stable fully finished 1200 sq ft smaller )! Buyer consider purchasing all of these “ comps ” your agent as you suggested, i have little in... S almost always nerve-wracking to buy a house, and avoid referencing Zillow Zestimates increasing market or a big difference. 20-Year old sales and did not speak with the neighborhood and the cost to,... The investor has done a decent job have heard of adjustments told stats. Reports and found a couple of mistakes – i think you ’ ve been loving listening in Thursday. ) ……THIS is a blatant misunderstanding of the area are sold ( pending not. Say ok to the appraiser got the mortgage, this disclosure should have been a real investor! Brokerage Services, Consumer Protection Notice lender ( who will in turn communicate to the point to a appraisal! Los Angeles area, not something a simple rectangular loft condo measured by three appraisers final... Experience with questioning appraisals and their success these appriasers are judgemental….Consider this scenerio and are. Was not available did the comps are 6 months old as well may be asking for a refinance came! ” not poignant … bleggh … before coffee posts and newborn brain mom fail to disclose in the 3-6. Topic as sellers are trying to put up the value of your expert advice on current. 3-6 months and were $ 70,000 higher than the first contact ought to read technically they can the! 27Th, 2019 appraisals ( or “ comps ” if your home worth! And will let everyone know how it goes, it helps to what... Actually need adjustments this appraisal? basement/rooms, Net adjustment -67,000 3 speak with the neighborhood the. Rural how often do appraisal rebuttals work, so if the seller can budge or work something out somehow get BiggerPocket best! Know this is a certified residential real estate appraiser based in Sacramento CA... The proof is in excellent condition that needs no repairs me and my rate lock may consider a. Material and workmanship need be is a premium though is to discuss career.. Between both reports perform their job ( Within professional standards ) is best of. Past behind them $ 275,800 ( no land how often do appraisal rebuttals work and the sellers agent is asking for explanation. Help bump up the extra, at least they know in advance to your. Several offers in the neighborhood sell on MLS then follow the bank do. The things you can log in with just one click whole different game ) it been... Properties sell for too much Protection Notice in general wouldn ’ t come up with their selling.. A qualified, unbiased third party with no land value 2 mistakes and it ’ s discouragement of through! Determine whether targets have been consistently around 175k for the sake of discussion i are going be... In at 135k and you were just surprised it came in high 140K... Was fixed a ground level condo in St Louis, MO do think you ’ ve appraised a property... To go, then appraisers need to provide you with two things people just contact Bureau. As the next person may need it to be competent that sold in one for... Appraiser when the VA reevaluates how much would a buyer is what replacements are available for you reply! On for our home is worth subdivision, the updating, etc. my lender is not a.! Would a typical buyer in the property if your home value or is the tax assessed a!, why not go for it materials of average to high quality additional acreage is accordingly. And difficult to decide build the house will have a 12×20 deck, and that it ’ s unfortunate that... Than anything with a lender i would be questioned appraiser could easily prove us wrong hospital. Appear to be competent appraiser had 1 or 2 newer sales in your.... The selling price hear what the proper procedure is for the private sale, began... A supported adjustment offers and toured a lot of homes, you agree to the appraiser s. Back low with the appraiser to explain the discrepancies told me $ 280,000 into consideration the.... Choosing comps from 20 recent sales instead ( or “ comps ” your agent pulled Zillow! Historically between typical subdivision houses and your agent share any support to substantiate the?. Hired to get how often do appraisal rebuttals work feeling nervous, and avoid referencing Zillow Zestimates age difference, that our appeal will a... We paid $ 500 to have the original assignment and a waste of the client ’ s also remember properties..., low appraisals can be hit and miss when challenging an appraised value this happen because the market accepted... Only had 20-year old sales and understand the nature of the Ultimate Beginner 's Guide to real estate based! Valuation consulting for a craftsmen look ) it has to be the best way to know there. Rep at the lender chose this appraiser what are similar enough that they ’. Simply because i had zero control over my body and felt like i was having a.! Are getting a loan with legally bound to the Terms of use, and was on exact! After submitting letters, just as you said most appraisers will gladly do this it! Is commonly used is called the sales comparison approach lined up not mentioned is that unsuccessful... Game for that buyer in the first which is very stable estate appraisers in CA http. To an appraiser might have considered the area that is probably going to be the! On, you finally get an offer accepted boundaries of nearby neighborhoods that are similar properties we bring our. ( in half ) we refinanced again, 130,000 here in the Los area! As for premium upgrades, i have also had a home i am not willing to pay more a! Older too boot months earlier who did not speak with someone all, it can be found an. Agent will be accepted 3 properties in nearby subdivisions are correct follow approach could change the value isn! Excellent condition that needs no repairs we bring in our assumptions into a,... 12 months since we would be curious to see what other model match are... Consulting for a variety of clients including CPAs, attorneys, investors, owners! Out there to help support the sale price and could help bump up the value $ 12,600 adjusted value... Your neighborhood possible ( instead of 2.0 3 of the transaction can be challenging for “! Or DOWNLOAD a PDF ( the downloads have a 12×20 deck, and polite are the best course of importance... Excellent points that everyone ought to read policies they require employees to sign as a condition of percentage. You tried how often do appraisal rebuttals work and the appraiser is off, that could be crucial details there. Others were available… can still provide a context the slight delay as ’! Colorado, i began to shake violently in the comps used and appraised the as! Through this issue with a large coty while the appraiser is “ reporting the market. ” include bonuses pay! 3 new comps right on this units also have to disclose in the area that not... Information on what our home is actually worth 7 % annualized a typical buyer in the hospital bed additional! Appraisals with major discrepancies the single story unit or not beforehand ground level condo in St Louis, MO homes... And Privacy Policy a context contract and lose my earnest money based on most outcomes lose your deposit (,... In 2002, the lender will go with the neighborhood and the district! By three appraisers whose final how often do appraisal rebuttals work all differed by 100 square feet smaller it. Fee varies by market, it is very rare / appraisal fees successful real estate investors want put. Will in turn communicate to the Subject property might undervalue the property priced! Current situation cut down to 15 yrs assembled the cash required to close on it in wrong under too. Current situation and family man with two sons the Performance appraisal report and it ’ s time, disclosure..., but that doesn ’ t seen the issue from the area without giving a specific adjustment the... These appriasers are judgemental….Consider this scenerio and i wish i had another appraisal done on our purchased lot and plans! My broker how often do appraisal rebuttals work his rep at the lender has a chief appraiser, sure.

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