Home Selling in 42748>Question Details

Grimes_01, Home Seller in 32258

Do I have any recourse for an appraisal that came in $14k lower than the appraisal we had done 4 months ago(? I even provided alternate comps, no luck

Asked by Grimes_01, 32258 Thu Feb 16, 2012

We are selling our home, FSBO, and had our home appraised, initially, to know what to set our asking price at. There were a few inaccurate details with the second appraisal. Our buyer's loan is a FHA loan so we have been told the only way another appraisal can be ordered is if the underwriter deems it necessary. He/she denied another appraisal. I feel like we are being bullied (for lack of a better word).

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You have no real recourse against the appraisal since its just an estimate of value. You have a few options - if the buyer really wants the property see if they will pay over appraiser's value knowing that you have provided comparables that show its value to you and they made the offer that they felt the property held. I have had a FHA buyer pay 40K over the asking price because they felt the property really held that value. If they don't want to pay over appraisal then you need to move on to another buyer or lower the contract price to the appraiser's value. You must review the buyers financing carefully if you take another buyer - There are more conservative banks, more conservative types of loan, etc. Having someone put more than 20% down payment is always suggested. If you take an offer with less than 20% down payment then you may have an appraisal issue not just with FHA but also conventional because of Mortgage Insurance. Mortgage Insurance companies do their own internal evalutiona of price and have cut values on contracts for buyers I have worked with. Good luck!
1 vote Thank Flag Link Thu Feb 16, 2012
FHA will allow for a 2nd appraisal but it is still FHA underwriter's discretion.
0 votes Thank Flag Link Sat May 11, 2013
I have had success in the past debating an appraisal with inaccuracies. Although, the appraiser completely missed a full bathroom, so it was a significant inaccuracy. I would call the appraisal company and the lender and discuss this. Ask to speak to the underwriters supervisor and explain your case.

Unfortunately, Appraisers and underwriters rule the real estate world lately. I recently refinanced a property in which my my market analysis showed a value of $215,000. To my surprise the appraiser appraised it at $237,000. The underwriter didn't like that appraisal and order a second one. The second appraisal came back at $174,000. How can two appraisers be $63,000 apart!?!?!

Good luck, pleading your case with the underwriters, as they will have the final say.
0 votes Thank Flag Link Thu Feb 16, 2012
You could possibly ask for an appraisal review. I would try that
0 votes Thank Flag Link Thu Feb 16, 2012
Unfortunately, your only recourse is to go directly to the company who did the appraisal (not the appraiser) and plead your case. Since it's and FHA appraisal, that low amount is tagged to your property for a few months so that any other buyer doing an FHA loan will have to use that same amount.
0 votes Thank Flag Link Thu Feb 16, 2012
There is very little you can do, unfortunately. Did you report it to the bank and to the company who did the appraisal? If you did and they refuse to make the corrections then there is very little recourse. You could report the appraiser to the licensing authority in your state but unless the inaccuracies amount to gross incompetence that may also be a waste of your time.

I had this happen on a home I had listed. Fortunately it was only for a refinance but still the homeowners got a smaller loan because of it. It was lake front property yet the appraiser gave no consideration to that fact whatsoever, he didn't know the difference between a raised ranch and a bi-level and cut the square footage in half, refusing to count the first floor entirely. He even labeled a photo of the toilet "Living room". Everyone who saw the appraisal said this was gross incompetence, yet when it was brought to the appraiser's attention he only made very minor changes (the photo, for example, was never fixed, and the lake front feature was never accounted for) and the bank also refused to do anything. My clients reported it to the State and now, nearly two years later, they are still waiting for the State to respond to their complaint.

It's very frustrating and it is happening all too frequently these days. In general, appraisers are getting paid less, which means more and more incompetence as the good ones get out of the business, and more and more down right incompetence. I wish I could give you more hope, but that just seems to be the way it is these days.
0 votes Thank Flag Link Thu Feb 16, 2012
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