An appraisal is one of the key components of buying or selling a home, and if potential issues are found with that opinion of value, buyers and sellers have options.
Here are four tips to consider before challenging an appraisal:
- Read the appraisal. It’s important that homebuyers and sellers carefully read the appraisal to check for potential inaccuracies. Perhaps a renovation was completed, but wasn’t included in the appraisal report. Any errors should be reported to the lender so they can contact the appraiser.
- Check the comps. When appraisers work to generate a credible, reliable opinion of value for a home, looking at comparable properties is a key part of the analysis. Review what comps were used, and if issues are discovered, for example, the square footage is wrong, or an incorrect number of bedrooms or bathrooms were listed, point out those specific details to the lender.
- Ask for a qualified appraiser. Homebuyers and sellers should ask their lender for the qualifications of the appraiser, including whether they are designated by a professional association such as the Appraisal Institute. A qualified and competent appraiser knows, for example, how to conduct a thorough market analysis and how to make appropriate adjustments.
- Request a new appraisal. If a buyer or seller is convinced that the appraisal is flawed, a request can be made to the lender for a new appraisal. The cost of that second appraisal is likely to be incurred by the individual asking for it.
If you have an “opinion of value,” please share your comments.