There are few things worse than being told your home is worth below your list price. A low appraisal can lead to a canceled sales contract because lenders won’t approve mortgages for more than the home’s value. Most lenders have a process for challenging an appraisal. However, it will take a lot of work and research. See: How Do I Appeal My Appraisal Assessment?
If you aren’t happy with the appraisal, the first thing you should do is read the copy. Look at it, and really be honest as to whether or not you can offer a “sound” argument. What did similar homes sell for in your area? If you can find that many areas similar to your home sold for more, then you may have a sound argument.
It is worth bringing this to the attention of both your bank, and the appraiser. Especially if any of those sales occurred after your appraisal. What you’ve got to do is give the appraiser a reason as to why your home is worth more than they said it was. That will be the goal throughout the appeal process.
The next thing you’ll have to be able to do is point out any missing comparisons; or, any bad ones. The appraiser might not know about all of the homes in your area that have sold in the recent days. If the houses in your home rarely sell, that’s an issue.
All comps should show properties that have sold in the last three months. If your appraiser is using comparisons from anything more than three months old, you have a pretty good argument. You can try to show that the market has changed since then. However, this is only viable if your appraiser really did use comps that were outdated. Or, if they didn’t even factor comps in at all.
Another thing you can do is show them any improvements you made to the house. Be sure to also show them receipts. They might not have noticed that you added stainless steel appliances to the kitchen, or that you added a walk-in closet. Maybe they missed the brand new fireplace that you added in the bedroom.
You never know; appraisers are people too. They could have been having a bad day, and rushed through the appraisal. The last thing you can try to do is call another appraiser, in order to get another opinion. Of course, if the next appraiser says the same things that the first one did, you’re going to have to start accepting the new value of your home. Read on to find out more about: How to Challenge a Home Appraisal.