A low appraisal can lead to a cancelled sales contract because lenders won’t approve mortgages for more than the home’s value. That could be grounds to dispute an appraisal. If you’re in this situation, here’s the steps you can take to challenge your appraisal. The best way to know what a home is worth, the argument goes, is to compare it to a similar home that has recently changed hands. If good salesmanship fails to get a you a good appraisal, it’s time to dig in and do your homework. Most appraisals are finished within two weeks, and often earlier. To work out how much a home is worth, an appraiser examines recent sales data in the surrounding area. An inaccurate appraisal can really throw a wrench in the home buying process. Hit up sites like Trulia and Zillow, which show recent home sale prices. Clean up the yard, do some basic landscaping, and make sure the place is well lit. 16 Your New Mortgage. Short sales and foreclosures can also throw off appraisals of similar homes. Should i call the appraiser and check the status of the appraisal?" If, after the appraisal comes back, you see that the appraiser missed some of the changes you’ve made, let the lender know. Take a deep breath — there many ways to tackle this scenario! This can take anywhere from five days to a few weeks, again depending on the complexity of the assignment. Powered and implemented by FactSet Digital Solutions. The examination itself can take anywhere from 20 minutes to 3 hours depending on the size and details of the property. Seems like you want to challenge an appraisal because you don't like it not because it is wrong. In the end, you may or may not be able to get the value changed. By Shannon Slater Real Estate Appraiser with DW Slater Company 1350025 Email Short URL Share: May 13, 2015 02:03 AM When will we get the appraisal? Another common question is: How long does the FHA home appraisal process take? There are three major parts to a home appraisal: Property Visit and Examination First, the appraiser needs to physically go out and visit the property for a full examination. Do not be alarmed that the appraiser only comes into your home to take pictures. So, the length of time between home appraisal and closing can vary from one transaction to the next. ©2020 FOX News Network, LLC. Market data provided by Factset. So what do you do if that all-important appraisal comes in lower than expected? This table does not include all companies or all available products. Look at the comps the appraiser used. House sellers depend on appraised value to give prospective buyers a competent estimate of the home's value. Interest.com is an independent, advertising-supported comparison service. Too many people just contact the appraiser and say “you’re wrong,” says Lear, owner of Lear-Annoni Appraisals in Eden Prairie, Minnesota. Those didn’t exist in Shorewood, so the bank accepted comps from a different suburb.”. Quotes displayed in real-time or delayed by at least 15 minutes. As long as there is someone at your residence to let the appraiser in, the assessment can continue. Most lenders have a process for challenging an appraisal, says Bob Lear, a real estate appraiser for more than two decades. FHA loan appraisals often take a bit longer, because they’re … If a home changed hands without ever being listed, it’s similar to your home and it sold for more than the appraiser said your home is worth, then that’s new information the bank and appraiser should see. » REVIEWS: Find out why 150,000+ homebuyers rate Veterans United 5-Stars. Our 4 smart moves won’t guarantee the outcome you’re looking for, but they should help protect against honest mistakes. is the less confusing way of asking and most of the time you use a real estate agent, not an appraiser. According to the National Association of Realtors, of the 75% of contracts with settlement contingencies, 41% involved appraisal issues. Because the appraiser works for the lender and not for you, you often don’t have a lot of control over who comes to put a price on your home. The exact answer will vary due to a number of factors, including what state you live in. Appraisers try to use comps that have closed within 90 days of your contract and within a one mile radius of your home, but they may have chosen homes that aren’t a representative sample. How to Dispute a Low Home Appraisal. The appraisal itself can take anywhere from 15 minutes to several hours depending on the size and complexity of the home. The nest step in making sure you get a fair appraisal is to talk the place up while the appraiser is there. All Rights Reserved. The Bottom Line . Finally, she was able to close on time – she closed the loan from start to finish in about 15 days! I really don’t know why the appraiser didn’t use closer comps, but my question is this. If it's been 2 weeks, someone dropped the ball on your appeal. Furthermore, this new lender was able to get me a better rate since we waited and rates had gone down in the interim. The reason why you should always challenge the grievance is that if you are constantly marked down in your appraisal, this could be a prelude to being put on a performance improvement plan And if you’re trying to sell a home, a buyer with an offer on the table might have to back away if the appraisal pegs the house below the offer price. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where and in what order products appear. Interest does not endorse or recommend any companies. How long does it take to close on a house? After all, an appraisal is just the appraiser’s opinion. An appraiser’s visit should be treated much the same way you would treat a potential buyer, which means you need to focus on improving your curb appeal. In most cases, the appraisal can be completed within a matter of days. Most appraisers do a reasonably thorough job evaluating a house, and any appeal must be firmly rooted in facts the appraiser either did not consider or incorrectly considered. Bill can be reached via email at [email protected] or by phone at 508-625-0191. The Home Appraisal Timeline Your lender may arrange the home appraisal, although the seller will eventually pay for it at closing. Obtain a Copy. The first step in challenging an appraisal is understanding how an appraiser comes up with the figure. Save yourself the stress and don’t freak out. After that, the appraiser has to prepare a report. Understanding the Appraisal. In addition to that, they wanted to know if other appraisers had access to the appraisal… In the next poll we asked: “On average, how long does it take you to complete a 1004 interior inspection appraisal report including inspection time (excluding driving time)?” This was another popular poll with 4836 responses. Are there other comps that are arguably more appropriate? My bank encouraged me to challenge the appraisal and I need to provide 3 new comps. The winner here was “4-5 hours” with 39 percent of the vote. To get a second look, “you have to provide me different data — data that is different than the data I used,” he said. Why Does it Take So Long to Get the Appraisal Back? Richard L. Borges II, past president of the Appraisal Institute, a Chicago-based industry group, says appraisers often find it handy to have the owner present during a review of the home because it lets them ask questions and get them answered right away: How old is your roof? If properties rarely change hands in your neighborhood, that’s another potential problem. Not all homes are created equally and the appraiser might have been basing the estimate on a property that only bears a superficial resemblance to your home. Q: How long does it take to get my appraisal report back? Appraisal problems can delay or prevent closing. Appraisal prices vary by region but are usually several hundred dollars. If you're the buyer, the bank will only let you borrow up to the appraisal amount, so you might not be able to buy the house. Read your copy of the home appraisal, then consider whether you can offer the single most persuasive item: new comps. Errors on the appraisal report identified in underwriting can take several days to fix because the appraiser is an outside third party, often contracted through an appraisal management company. But you must be prepared to point out mistakes the appraiser … How Home Buyers Can Help Themselves Here are some things a home buyer can do between the appraisal and closing, to help ensure things stay on track: Once you’ve compiled a list, bring it to the appraiser or bank to challenge the appraisal. These estimates aren’t a hard science and if you feel an appraiser has low-balled your home, here’s how you can make it right. Comps should be properties that have sold within the last 90 days. Although there are often exceptions to the rule, if the appraiser does not experience any difficulties (for example, limited sales in your area), our appraisers average a two (2) to three (3) day turn around time after the day of inspection for standard appraisal reports. Interest.com does not include the entire universe of available financial products or credit offers. Challenge the appraisal in a respectful manner, always keeping conversations business-like and emotionless. We submitted it on Wednesday, the management company "received" it on Thursday, we had our response on the next Wednesday, though they claim a 48 hour turn around. 2. He remodeled the kitchen during that six-month period and sold the house for what he paid for it, plus the entire cost of the new kitchen. If your property is unlike the others in its neighborhood, look at the comps the appraiser used. But you must be prepared to point out mistakes the appraiser made in comparing other properties or by missing new or upgraded features in your home. Of course, appraisers are human and can make mistakes, so diligence is important. My problem is I have too many to choose from. An SFR is not a rental comp for a triplex, it just isn't. Do I use comps that are more close to my sq footage but a further distance away or use the closer comps that may be larger than my house? For instance, while your home might have a similar square footage to other homes in the area, you might have a finished basement, a recently remodeled kitchen, or a two car garage, all things that should boost your home’s value. According to the National Association of Realtors, of the 75% of contracts with settlement contingencies, 41% involved appraisal issues. If you are considering a career in the appraisal field, you may be curious about how long it takes to get licensed and start earning an income as a real estate appraiser. If the appraiser is unable to enter your home, you will need to reschedule your appraisal date — which could cause delays in your loan approval process. Legal Statement. But this doesn’t have to happen to you; find out what you can do get a satisfactory home appraisal so you can sell for the best price possible. The same goes for inside the home. However, you can make recommendations or requests of the lender and you should insist they have someone local appraise your home. How long does it take to complete the program? How to Challenge a Low Real Estate Appraisal. Mutual Fund and ETF data provided by Refinitiv Lipper. or redistributed. Here is some information to help answer the frequently asked question, “How long does it take to become an appraiser?” A: A good appraiser will have the report back to the client within 24 to 48 hours after the time of inspection. A low appraisal can lead to a cancelled sales contract because lenders won’t approve mortgages for more than the home’s value. Request a second appraisal. The products and offers that appear on this site are from companies from which Interest.com receives compensation. I had to appeal an appraisal a couple of weeks ago. You’ll need to find several homes in the area that you think are comparable to your home that have recently sold for more than the appraised price. Bill has helped people move in and out of many Metrowest towns for the last 29+ Years. Aaron, thanks for responding! This material may not be published, broadcast, rewritten, or redistributed. “That appraiser compared the client’s home to six homes in Minneapolis, St. Louis Park and a completely different neighborhood in Edina,” Lear said. In fact, the initial appraisal was wrong. Tidewater Initiative. Your lender will not approve the mortgage loan since the appraisal does not support your purchase price. Our 4 smart moves won’t guarantee the outcome you’re looking for, but they should help protect against honest mistakes. Because appraisers take so many factors into account, their appraisals can often be low, which Merrill said typically results in either the buyer walking away or the lender declining the loan. He or she might not know all the homes in your neighborhood that have sold recently. Nothing can kill a real estate deal faster than a low appraisal. Sometimes a low appraisal can … We are aware of the deadlines for closings and understand that a delayed appraisal slows … If a similar home in your neighborhood recently sold for more than your appraisal, especially if the sale took place after the appraisal, bring that to your bank’s attention. Selling a home and buying a new one? Another common problem with appraisals is that the economic downturn decimated home values in many areas. How Do I Contest an Appraised Value of a Property?. Lear recalls a duplex in Shorewood, Minnesota: “We did the best comps we could, but the bank needed a comp with the same square footage and the same bedroom number. After all, an appraisal is just the appraiser’s opinion. Copyright 2020 Interest.com a Red Ventures company. How often do you have to have your septic system serviced? “Not one of those is near this house. Lear remembers being hired by a homeowner seeking a second opinion on the appraisal of his home in Edina, a Minneapolis suburb. Market data provided by Factset. Dig into the data and scour the images to find homes that offer the same space and amenities as your own. If your appraiser used older comps, you may be able to show that the market has changed. If you’re looking to refinance and the bank gets a low-ball estimate from an appraiser, it will likely cause the lender to rescind the offer or stick you with a much higher interest rate. You’ll also want to know some of the nitty gritty details, such as when hot water tank was last replaced and the type of wood used in the flooring. This material may not be published, broadcast, rewritten, If this happens to you, you will need to take steps for your sale to proceed to closing. Borrowers can try to combat a low valuation before it’s even official. The old kitchen was from the 1960s, and the house was in an area that was becoming very popular.”. The appraiser has to answer to underwriters, so they’re not very willing to change values. "Be sure to request someone with geographical knowledge and explain why you are asking for a second appraisal." Legal Statement. An appraiser might not have noticed your home’s new or upgraded features: a new kitchen, redone or additional bathrooms, updated decor, updated roof, new furnace, updated central air conditioning, finished basement or new fireplaces. About the author: The above Real Estate information on the how to challenge a low real estate appraisal on my home was provided by Bill Gassett, a Nationally recognized leader in his field. Now, this is generally a long-shot. This compensation may impact how, where and in what order products or offers appear on this site. A “comp,” in the real estate world, is a point of comparison. You can attempt to sway your lender to revise the appraisal by getting one on your own. Most lenders have a process for challenging an appraisal, says Bob Lear, a real estate appraiser for more than two decades. 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