12 Ways to Challenge a Home Appraisal
In real estate, there are several circumstances when your entire transaction hangs in the balance, based on the results of an appraisal:
When you are buying a home, you need the appraisal of the home you are buying to match or be higher than the price you have contracted.
Conversely, when you are selling your home, you will want to appraisal value to match or be higher than your selling price.
And finally when you are refinancing your home, you want the appraisal to be as high as possible.
So what do you do if that all-important appraisal comes in lower than expected?
- Don’t panic: Take a deep breath — there many ways to tackle this scenario! Save yourself the stress and don’t freak out.
- Obtain a copy: Have your real estate agent or mortgage officer obtain a copy of the appraisal for you so you can review it in detail.
- Review the comps: You and your real estate agent need to review the list of homes that the appraiser used for comparison. This is the most powerful tool you have to contest an appraisal. The selection of the comparable homes used can show a wide variety and variances. You and your agent will want to examine the ones the appraiser selected.
Look for these key comparisons:
a. Square footage
b. Lot size
c. Location on the block of each home
d. Condition of the homes
e. Age of the homes
f. Amenities of the homes
g. Custom home vs. tract home