Having an appraisal come in lower than expected is a tough blow for any home owner, but it’s particularly troublesome when selling your home. A low appraisal can cause the whole sale to fall thorough since lenders won’t approve mortgages for more than the home’s value. Thankfully, this isn’t an every day occurrence but it can happen. If it does, there are actions you can take as well. So if you get an inaccurate home appraisal here’s how to handle that.
Check for errors
Be sure to read the report carefully yourself. Double check things like square footage, bedrooms and bathrooms. It’s possible that there errors were made unintentionally. Before getting too worked up, start by looking at the information in the report and see if there are obvious and easily correctable mistakes. Another common issues is if the appraiser overlooks the additional upgrades or remodeling to the home. Try leaving a letter to outlining everything your’ve changed and updated or show before and after pictures to highlight the new features.
Check the comps
The appraiser will be using comps (other homes in your area recently sold) that are approximately the same as your home. Be sure to check the comps yourself though. Sometimes homes that are sold from foreclosure or short sales will throw off the comparisons. Also, if your home has more unique features and is harder to compare to – an appraiser may be willing to use comps from another similar neighborhood. It’s also tricky when you live in a neighborhood that doesn’t have much turnover. The comps should be from within the last 90 days. Anything older than that and the market may have changed since then.
Get a second opinion
If the report seems to have no human error issues, and the appraiser appears unswayed by the upgrades you’ve pointed out then it might be time for second opinion. The initial appraisal fee is generally paid by the borrower so expect to cover the fee for the new appraisal. However, it could well be worth it in the long run.
There may be no guarantee that your appraisal will change with these tactics, but they are a good place to start if you feel you’ve received an inaccurate appraisal. They can at least provide steps to take so a seller doesn’t feel helpless against a low appraisal. Working with a good REALTOR can also help guide sellers through this process with a lot less stress. If you’d like to consider listing your home and want help through the appraisal and other parts of the home selling process, call DeSelms Real Estate today at 615.550.5565!