Disagree With A Bank Appraisal?

Sometimes homeowners and purchasers disagree with bank-ordered appraisals. This generally happens when an appraisal comes in lower than expected. Since the appraisal affects how much money a mortgage lender is willing to lend the purchaser, the entire sale could be riding on the appraisal value. See, if a home’s appraised value is less than the loan amount, the lender will not approve the mortgage.

If the Appraisal is Low, You Can Dispute

You can ask the mortgage lender for a different appraisal, but you might need to make a case. Review the document for actual factual errors. Did the appraiser neglect to include the second bathroom? Did the appraiser put in the square footage incorrectly? Maybe the home borders on a nearby county and the appraiser somehow put in the wrong county. If you can find errors that are non-debatable, you have a more significant case.

Check the Comparable Properties

Since appraisers use comparable properties in the area to value the home, ask your real estate agent to see if there are any different comparable properties. The agent might be able to find higher-priced properties. If they can, your can use that information to dispute the value.

Cancel the Sale of the Home

Usually, contracts allow the purchasers and sellers to cancel the purchase agreement if the appraisal is low. If you are buying a home, this might work to your advantage. See, you could cancel the sale and then submit a new, lower offer. If the appraisal is mostly accurate, the buyer might not want to risk losing the sale.

Find an Alternate Lender

Different lenders often use different appraisers. Since home values can vary depending on the opinion of appraisers, if you genuinely feel that the appraisal is off, you can always try a different lender. Make sure that the new lender uses an appraiser with experience in the area where the home is actually located. An experienced, local appraiser may present a more accurate value.