What is the recourse when there is a disagreement on the results from an appraisal?

Asked by Trulia Philadelphia, Philadelphia, PA Thu Dec 13, 2012

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Chris Lane, Agent, Philadelphia, PA
Thu Dec 13, 2012
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I guess that depends on what exactly that disagreement consist of. If you issue surrounds the value of the home then there is an option.

So the federal government has stepped in and dramatically regulated the way mortgage loan officers and lenders can interact with an appraiser. Often the lender has no idea who the appraiser going to home is as they are selected by the neutral third party appraisal management company. However, there are some steps you can take to address and potentially change the current outcome and value. By law since the home buyer pays for the appraisal out of pocket it then entitles them automatically to a copy of that report. There is a 90 day window of opportunity for which you have to request a copy. In the situated of the seller, they too have the option to request a copy from the buyers agent to confirm the value of their house for mortgage purposes. Especially, if that value doesn't support their list price at the time an executed Agreement of Sale was executed.

Now, the Lender and/or Borrower alike have the right to ask for clarification and justification on the comparable properties used in that report. A strong tool in this is to look at the photo's used for the comparable properties...then go to someplace like Trulia, Zillow, Realtors.com (or have your agent) look up the properties...if the photos match the ones on the comps former listing then it is HIGHLY likely that the appraiser never did a drive by of the comp properties. The is a variable that can be disputed.

For your assistance, I have attached a link to a blog article written by a licensed appraiser who maps out the process in detail. This article has been used to refute and successfully disputed appraisals. Unfortunately, this doesn't always get you the value you want but often closes the gap to make the loan a reality! Please note, in no way am I endorsing the site or it's author but it's a rather useful, knowledgeable, and straight forward article.

http://activerain.com/blogsview/1342052/how-do-you-appeal-a-…
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Edith Karoli…, Agent, Winnetka, IL
Fri Dec 14, 2012
Well there are always ways ..... If the appraisal is truly way off the sales contract price a second
appraisal could be requested by either side - The Realtors could explain which ones of the comparative properties they disagree with, and have the appraiser double check their arguments.

It is never easy, one can also check if the appraiser is actually a professional familiar with the
area, or not at all, by how many appraisals he has done in that particular market place.

So yes there are ways..... Easy, may be not but if important certainly always worth trying....
Sincerely yours,
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Investors alike....And always with a SMILE :)

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Suzanne MacD…, Agent, Morristown, NJ
Fri Dec 14, 2012
There is recourse but in my experience it is very difficult to get an appraiser to change their opinion. It's like asking them to admit they are incompetent in the first place. It's a real problem these days with the advent of 'appraisal mills'. I can't tell you how many times I have seen horrible appraisals (one had a photo of a toilet labeled "living room"). Often these firms are from out of the area, don't know the market and so do not adequately account for such important features as lake front property.

If push comes to shove you can always escalate to the State Agency that licenses the appraiser. It probably won't save the particular transaction you are working on but it may just lead to some sort of disciplinary action and better, more accurate work in the future.
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