selling your home Deanna Picinich December 12, 2023
So, you've received the appraisal on the home you're buying or selling, and it's not the number you were hoping for. Before you let panic set in, let's talk about your options. Yes, you can appeal a low appraisal, and here's how to strategically approach it.
Stay Calm, Plan Strategically
First things first, take a deep breath and don't panic. A low appraisal is a common hurdle in real estate transactions and can often be navigated with a clear plan of action.
Understanding the Appraisal
To effectively appeal an appraisal, it's crucial to understand why it came in low. Was it due to a lack of comparable sales in the area, overlooked upgrades, or human error? Understanding the reasons behind the low appraisal will shape your approach to the appeal process.
Crafting Your Rebuttal
The official term for an appraisal appeal is a 'Reconsideration of Value'. To initiate this process, you or your real estate agent will need to provide evidence that the initial appraisal was flawed. This evidence could include overlooked recent comparable sales, proof of home improvements and their value, or errors in the appraisal report. Be specific and rely on hard data rather than emotional arguments.
In your appeal, documentation is key. Gather receipts for recent improvements and highlight comparable sales that support a higher valuation. The more documentation you have to support your claim, the stronger your appeal will be.
Consider reaching out to the appraiser to discuss the appraisal directly. Sometimes, a simple conversation can lead to a revision without the need for a formal appeal. It's worth exploring this option before proceeding with the formal process.
When appealing an appraisal, time is of the essence. There are often tight deadlines to contest the valuation, so be sure to check in with your lender to understand the window of opportunity for the appeal.
Engage the Lender
Remember that the lender ordered the appraisal and has a vested interest in the loan closing. Engage them in the appeal process and seek their advice and assistance.
Exploring Plan B
If the appeal doesn't yield the desired results, you may have the option to seek a second appraisal. While this is not always an available option, it's worth discussing with your lender if you believe the initial appraisal was off-base.
While appeals can be successful, they do not guarantee a higher valuation. It's important to prepare for all possible outcomes and have a backup plan in place. This could involve renegotiating the purchase price or adjusting your expectations as a seller.
Persistence Pays Off
A low appraisal can be disheartening, but it's not the end of the road. With the right approach and persistence, you can navigate through it. Keep calm, gather your evidence, and present your case. A strong appeal could lead to a favorable outcome for your home's value.
In the world of real estate, few things are set in stone, and an appraisal is just one piece of the puzzle. Stay focused, and remember that a low number might just be a temporary setback on your path to real estate success. Good luck with your appeal!
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