If you disagree with your home’s low appraisal, here are your options.
If you’re selling your home and its appraisal comes back low, what can you do if you disagree with that appraisal?
Before I get into that, you should know that a low appraisal is hard to reverse. Your real estate agent can help you, but they have specific guidelines in terms of what they’re able to do. Your best bet for reversing a low appraisal is to order another appraisal from an appraiser who’d be willing to put up theirs against the previous one in front of a review board. However, that process can take months (if not years). Since not many people would be willing to delay their sale that long, there are a few short-term options you can pursue.
If there are glaring errors, you can walk things back pretty easily.
First, check to see whether the appraiser used the best comps in their appraisal. Twice in my career, my clients and I have had success by simply asking appraisers why they didn’t use other comps instead of the ones they did use. In these cases, they admitted to missing the better comps and updated everything accordingly. Again, though, this is a rare occurrence. As soon as you go back to the appraiser with new comps, their first impulse will be to defend the work they’ve already done. They won’t want to admit they made a mistake.
If there are glaring errors, you can walk things back pretty easily. For example, if the home is 3,000 square feet but they only measured 2,000, they obviously missed something. If the disparity is a little closer, though (e.g., 3,000 square feet versus 2,700 square feet), you won’t be able to overcome that because appraisers do their own measuring.
Usually, in the event of low appraisals, buyers and sellers end up renegotiating. Sometimes the transaction just dies. In one of my home sales, though, the buyer admitted that they thought the appraisal was wrong and agreed to work with the lender to get a new appraisal because they saw the value they were getting for the property. It was great for everybody, but these types of cases are unusual.
As always, if you have questions about this or any real estate topic, don’t hesitate to reach out to me. If you have a question you’d like me to answer in a future video, send it my way. If I end up using it, you’ll receive a gift card in return (just like the person who prompted today’s video). I look forward to hearing from you!