What steps can I take to correct an appraisal for refinance that is error-filled and appraiser refuses to correct any information?

Asked by Whitney, Boulder, CO Thu Apr 19, 2012

Our appraisal for our refinance came back very low (surprise!)...$15,000 lower than our appraisal done just 6 months prior...BEFORE the 203K rehab and our market in our neighborhood showing a 12.5% increase . When we reviewed the report and caught a laundry list of errors: square footage off by 200ft, states our updates/improvements took place MORE than 5 years ago (though work just completed in Dec 2011), states that our property is superior to 4 of 5 comps used but appraiser takes a $44500 depreciation deduction. And then there are the comps that were used (which is a whole other story). Obviously the errors impact value, but even after filling out the rebuttal paperwork with supporting documentation the appraiser refuses to open his report and correct the blatant errors. This sounds like highway robbery! Help!

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Sean Dougher…, Agent, Fort Collins, CO
Thu Apr 19, 2012

The website above is a good place to begin a complaint if you feel wronged. Best of luck to you!
0 votes
Flag Thu Apr 19, 2012
David Janis, Agent, Boulder, CO
Thu Apr 19, 2012
Once the appraisal is done, it is difficult to get it changed (as you have seen). There is no exact science to an appraisal and many times the appraiser is not familiar with real estate in the area that they are appraising.

The only thing you can do is get another appraisal and "help" the appraiser by sharing the research you have done.

When banks or relocation companies buy or sell a house, they will often get 3 appraisals and take the average. There is often a 10% swing in values between the high and low number.

The only true value of a house is what someone is willing to pay for it.
1 vote
Suz A, Agent, Longmont, CO
Fri Jun 14, 2013
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You should have been given a business card. Appraisers will correct errors of fact - like square footage. Yes, to talk with the lender on a refi. Often times, too, the lender can be swayed by additional information. And take heart, the word is that appraisers are not lagging this market as they were earlier in the year. If you didn't refi because the appraisal last year was derailed, try again. And please, come back and let us know if you followed advice here. Your feedback (and thanks) are our reward.
0 votes
Ron Rovtar, Agent, Boulder, CO
Fri Jun 14, 2013
Hi Whitney: I am always curious about how people have resolved issues like this –– or if the issues were resolved. Could you please update us about what you were able to accomplish?

0 votes
Dena Schlutz, Agent, Boulder, CO
Wed Jun 12, 2013
Unfortunately, all you can do is tell your lender to reject the appraisal. However, due to the new laws (2008ish) that prohibit the lender from making direct contact with the appraiser, the appraiser is protected by an Appraisal Management Company (AMC). You can escalate the issue with the AMC and try to get your fee refunded. An appraisal is an OPINION of value and three different appraisers will give you three different values. It's not an exact science, but should be accurate, complete and well supported.

Dena Schlutz
Owner / Broker
Estate Professionals
0 votes
Suz A, Agent, Longmont, CO
Wed Jun 13, 2012
I'm just appending an earlier comment i made. With regard to appraisals, you want to be proactive. You can get an appraisal adjust to account for any errors. You can argue that accurate comps were not used. But, before you get to that point, help the appraiser.

You can supply previous appraisals that include important information. If the appraiser doesn't have to do all the research, it helps.

And don't forget to stage your home as you would for anyone else taking a tour.

0 votes
Ron Rovtar, Agent, Boulder, CO
Wed Apr 25, 2012
Hi Whitney:

Appraisal issues have become more common for a number of reasons that we don't need to go into here. And there is some good advice below.

Since it is pretty clear that the previous appraiser has dug in his/her heels and will not reconsider, I think the best approaches would be to talk to your lender about a new appraisal OR try starting the refinance process over with a new lender.

If you get a new appraisal through either option I would work closely with lender and appraiser to make sure everything goes smoothly. Though you should not act like you are trying to influence the appraiser, you can provide comparable property suggestions and written documentation about the improvements you made (receipts and building permits).

furthermore, if the lender engages an appraiser from outside your local area (Boulder in this case), you may be able to request a different appraiser who has more knowledge of local real estate.

I am always available to answer questions from local homeowners, buyers and sellers.

Kind regards,
Ron Rovtar
Prudential Real Estate of the Rockies
Days: 303.981.1617
0 votes
Irina Karan, Agent, Fort Lauderdale, FL
Tue Apr 24, 2012
There are several things you can do:
1) Appraisal re-buttal - done by your loan officer - you mentioned that the appraiser refused to open the report. What did your loan officer say to that? Is there appraiser supervisor you could set an appointment with?
2) New appraisal ordered
3) New lender doing the refi
4) Prepare your own comps - with the help of your realtor - to discuss with the new appraiser,
if it comes to that. However, appraisers don't like to be "influenced" by anybody, so you may want to point out how your property is better than the comps that are applicable/6 months old/within 1 mile radius

Hope this helps,

Irina Karan
Beachfront Realty, Inc.
0 votes
, ,
Thu Apr 19, 2012
Hi Whitney,

If the appraiser is refusing to address your points, demand a new appraisal from a different appraiser.

I would also take things one step further and dispute the charge with your credit card company to get a refund for the 1st appraisal.
0 votes
Monique Cole, Agent, Boulder, CO
Thu Apr 19, 2012
Since the errors -- at least some of them -- are factual rather than subjective, I would refuse to pay for the appraisal. Tell your loan officer that you won't pay for the appraisal and if the appraiser refuses to make changes, move on. I always give a package to appraisers that includes the facts on the property, recent updates and my hand-picked comparable sales. Insist on being present to let the appraiser in the door (rather than using a lockbox) and hand the package to him or her.
0 votes
Thanks. We had the package and everything. It was in our trash can when he left:( I'm in the dispute process with my card as we speak.
Flag Thu Apr 19, 2012
Bob Gordon, Agent, Boulder, CO
Thu Apr 19, 2012
A big question is, who is doing the refinance for you? Your appraisal doesn't sound very helpful, but it is surprising that your mortgage lender allowed it to get to this stage. Having a local, referred mortgage lender can really be helpful. Since you are having all these issues, it would be good to know who you are using -Really sorry to hear about your situation.
0 votes
Brian Burke, Agent, Highlands Ranch, CO
Thu Apr 19, 2012
This is very common and a great deal of stress for whoever is getting the Appraisal done.
Not sure what you can do if Appraiser will not change Appraisal. If the Appraiser may not want to chance the appraisal and admit mistakes.
0 votes
Suz A, Agent, Longmont, CO
Thu Apr 19, 2012
There are fewer homes on the market. For sellers, that means there are fewer homes to compare to and the comps may not be all that similar. The appraiser might have to grab a short sale or foreclosure home. You can appeal to have the appraisal adjusted. Or, have another appraisal done.

Appraisals are busting up more deals than anything else we're seeing. It is the reason the real estate market is not moving in many markets.

This is a great article on the subject.
0 votes
Tim Moore, Agent, Kitty Hawk, NC
Thu Apr 19, 2012
Appraising is not an exact science while some people think it is. I have always said, "If you had 4 appraisers you will have 4 different numbers". It's an opinion pure and simple. Your two options are to show the appraiser where you feel they are wrong (have fun with that one) and asking for another appraisal.

Often sellers are not up to date with the market and often they "want" to believe their house is worth more than it is in the current market we have these days.
0 votes
Thanks! We realize this. At this point, we are looking for advice on how to get the "hard facts" which are not opinion-based correct on our appraisal. Please post if you have suggestions on how to fight that one.
Flag Thu Apr 19, 2012
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