For an appraisal report to be valid, it must contain at least 3 comparable homes that have closed within the last 90-180 days. Should nothing comparable have closed in that time frame, the appraiser can go up to a maximum of 12 months from the inspection date. Often, an additional closed sale will be provided along with 1-2 pending sales or active listings for a total of 6 comparables.
Selection of comps is somewhat subjective based on the appraiser since it really is a judgment call. The best comps will be of similar age, square footage, # of bedrooms/bathrooms, and style of the subject property. At least 2 of those 3 comps should come from the subject propertyâ€™s neighborhood. One must come from an outside neighborhood to better bracket the overall market area value. Appraisers do need to take into account school districts and city/county boundary lines.
The Appraiser Independence Code is part of an Act that all lenders must follow makes the disputing of a value quite difficult. To make a dispute, the lender must determine that the appraisal report is flawed and has a material defect. This means that comps that are â€œbetterâ€ must have been available but not used. Your agent would have to provide these â€œbetterâ€ comps to determine if a dispute is justified.
An appraisal cannot be disputed simply because it did not arrive at a certain value. That would be a violation of the Code.
Rodney Mason, NMLS #151088
Sr Loan Officer
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia with over a decade of mortgage lending experience.
Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203K Renovation (Streamline & Consultant) | HomePathÂ® | HomePathÂ® Renovation | HomeStyleÂ® Renovation | VA | USDA | GA Dream | Jumbo Financing.
I'd talk to your lender about it and see if you can go a different route.