Kelly, Home Seller in Oklahoma City, OK

Can you contest an appraisal that you think has been done wrong?

Asked by Kelly, Oklahoma City, OK Mon Aug 13, 2007

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11
After I wrote my post, I went to bed and thought I gave some bad advice. My advice was correct but it needed what Jim said afterwards. And although I agree with Pam and I always provide comps to the appraiser upon arrival, I disagree with her variance of only 5%. It can vary 50%! As Jim said, it can be a matter of opinion.

Where I made my error in not giving the complete story is spite. If you challenge the appraiser as wrong, your new appraisal might be more accurate in technique but even lower in value. If you are upset that you sold your house for a 20% discount and the appraiser said your home was only worth the low negotiated price, than the appraisal was probably influenced by the bank and the contract price. For example, if you sold your home to your daughter at 50% of its value and she wanted to get a loan for 80% of its value, the bank would strong arm the appraiser into appraising it for it's contract price. But even if the appraiser "did his job" and gave an honest value, the bank (in most cases) would not loan your daughter on the higher value, just the contract price (until it seasoned).

As I said in the other thread:
I just heard a Mark Twain comment the other day, "There are 3 kinds of lies, 1) lies 2) BIG lies and 3) statistics. An appraisal is manipulating statistics.

Here is another joke along that same line:

What is 2 + 2 ?
Four, right?

I asked that question of several people, and these were the answers I got:

A child simply replied "4"

A school teacher replied "4"

A mathematician responded "4"

Then I asked a statistician and the response was:
"Some where between 3.98 and 4.02"

Next, an engineer whipped out his pocket calculator and announced "3.99999999".

Finally, I asked my accountant and he replied,
"What do you want it to be?"

So the question to you is, was this appraisal done before or after you put your home on the market? Was it before or after you had a buyer?
Keep us posted,
Thanks,
Ruth
Web Reference: http://www.oak-park-il.com
1 vote Thank Flag Link Tue Aug 14, 2007
Ruthless, Other/Just Looking in 60558
MVP'08
Absolutely......you can challange an appraisal if you feel there is inaccurate data being used. However, it is much easier to work with the appraiser upfront my meeting with him, providing him comparables and other detail prior to him putting the appraisal together. By the way appraisals can vary as much as 5%.
Web Reference: http://pamwinterbauer.com
1 vote Thank Flag Link Tue Aug 14, 2007
Pam Winterba…, Real Estate Pro in Danville, VA
MVP'08
Contact
Is it a matter of opinion or a matter of fact? The original appraiser may amend their appraisal for free if it is a matter of factual error. Examples from personal experiences : Flood Zone A marked when home was in fllood zone C or X ../// Square footage in county records was wrong and house had to be re-measured by the appraiser. /// Additional comparables that require fewer adjustments. /// Math errors.

You didn't give us a clue as to what you think was done wrong. Just having a lower value than you want it to have doesn't make it wrong. Is it because a year ago it was worth $4xx,000 and today the appraiser says its only worth $3xx,000?

If it is simply a matter of opinion, then its not wrong even if the value doesn't agree with your estimate of value.
1 vote Thank Flag Link Mon Aug 13, 2007
Jim Walker, Real Estate Pro in Carmichael, CA
MVP'08
Contact
It can be an arduous process, but yes. You or your agent can provide the appraiser with the data which you feels makes your case (sales comps, list of upgraded features, etc). I have changed appraisers' minds before. If that doesn't get you anywhere, I would consider bringing in another appraiser for a second opinion. To help ward off pitting the "buyer's appraisal" against the "seller's appraisal," you can check with the buyer's bank to make sure to select an appraiser that is on their approved list of professionals. Keep in mind that you will most likely foot the expense for this one, and there is no guarantee that the results will be any different.

Further, you will still have some big hurdles to clear even if a second appraisal reflects a higher price. For starters, the buyer is most likely (depending on your local purchase agreement verbiage) not obligated to wait for a second appraisal to be performed. If there is an appraisal contingency in the contract, the buyer can most likely walk based on the unsatisfactory results of the original appraisal. If the buyer does agree to a second appraisal, he/she will not necessarily be bound to the results. You will probably have to negotiate price again due to conflicting evaluations. There is also the risk that the lender would be uneasy with the discrepency in evaluations. So even if the buyer accepts a new appraisal, the lender might not. Can you provide any specific insight as to why you think the appraisal was performed incorrectly?
1 vote Thank Flag Link Mon Aug 13, 2007
Also, find out where the appraiser does most of his/her work. If he/she does not do a lot of work in your market area. If it turns out this particular appraiser does not know your market as his primary market. You have a stronger case to get a second, "opinion".
0 votes Thank Flag Link Wed Aug 15, 2007
I had an appraisal come in on a property at, what I considered, 30% lower than a very low estimate of market value. I met the appraiser personally at the property, and knew he was totally unfamiliar with the are. The AVM came in higher than my conservative market value estimate. A second appraiser came out and everything sailed smooth from there. The LTV was 50% and it was a 7 figure value property.

I remain curious as to how this appraiser got a license. I never saw something so off as him. That, of course, was bizarre and not the norm. His credibility was so compromised that there was no problem accepting the appraised value provided by the second appraiser.
0 votes Thank Flag Link Tue Aug 14, 2007
Deborah Madey, Real Estate Pro in Brick, NJ
MVP'08
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Absolutely... I don't know that I would use the word "contest", but if you do not agree with the appraisal, have your Realtor provide the most current comparables and a detailed explanation of the local market.

Sometimes, the appraisers are not familiar with a particular market or are influenced by the purchase price or underwriting guidelines for a specific bank.

It is more than okay to provide additional information for a review and/or request for a 2nd opinion.

I just had a property where the appraisal came in $200,000 under selling price. The funny thing was that the appraiser came in at selling price, but the underwriter cut the value. A second appraiser went out and confirmed the original appraiser's opinion and raised the value.

Good luck!
0 votes Thank Flag Link Tue Aug 14, 2007
Absolutely. I had an appraiser comp my home against stick built houses because there were no stucco houses that had sold in the past 6 months. My stucco house was unusual though. It was built with tiles not bricks or cinder blocks and absolutely not stick-built balloon framing. I researched the building method and it was something done by the military. Anyway, the fire protection and insulation advantages were the same as brick homes. It appraised much higher against brick houses.

I have done the same thing with wrong square footage and one and a half story homes verses two story homes. Are you looking for a higher price? Have you seen the details of the appraisal?
Ruth
Web Reference: http://www.oak-park-il.com
0 votes Thank Flag Link Mon Aug 13, 2007
Ruthless, Other/Just Looking in 60558
MVP'08
Absolutely....you can get as many appraisals as you'd like as long as you are willing to pay for them. The obstacle will be to convince the lender to use the most favorable appraisal.
Web Reference: http://www.cindihagley.com
0 votes Thank Flag Link Mon Aug 13, 2007
The Hagley G…, Real Estate Pro in Pleasanton, CA
MVP'08
Contact
Absolutly. Can you give us an idea of what you think was done wrong? There can be mistakes. Sometimes there are factors unknown to the appraiser that affect values. If I think there might be an issue I'd meet the appraiser there and point out the differences, give them the number you need to hit, and talk to them about the neighborhood and your house. You might get lucky sometimes and get an appraiser in Norman that knows Norman and gives a good/fair/accurate appraisal. However you could get one from Edmond to go to Norman who's never been there before. So their appraisal might be different than the one that knows the area well. Your Realtor should be able to walk through the process of negotiating the appraisal if needed. After all the appraisal is just one person's opinion of the value of your home.
Web Reference: http://www.teamlynn.com
0 votes Thank Flag Link Mon Aug 13, 2007
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
Contact
Yes..You can, but it depends on the lending institution who ordered it whether they are going to allow a re-do. You better have a good reason for questioning it.
0 votes Thank Flag Link Mon Aug 13, 2007
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