Real estate appraisals are an opinion that can sometimes be challenged. There might have been a mistake made in the real estate appraisal report, listing your property as being worth much less than you would otherwise expect. While many home appraisals are low simply because of a real estate downturn, there may also be errors in the report.
Look for Differences in Your Appraisal and Past Appraisals
If you have not made any major changes to your property, but the appraisal is drastically different than it was originally, there might have been an error in your appraisal. Most often, the appraiser forgot an adjustment or did not have a recent enough sale to compare your home to.
Ask Another Appraiser
Consider consulting with a second appraiser. All appraisers will appraise a property differently, but if the appraisers have very different opinions of the value of your home, one of the appraisers might have made a mistake.
Make Sure the Forms are Fully Filled Out
Sometimes, appraisers are influenced not to check a particular box because they are told by a lender that the loan is less likely to be approved if the property values are seen as declining. Therefore, check the records to make sure this box is checked if property values are declining.
Look for a New Comp
You may be able to get an appraiser to appraise your home a second time if you provide him or her with a new comp. Comps are comparisons of your home to another home that has recently been sold and how much it has sold for. If another similar home sold for more, especially after receiving an appraisal, this new information may cause the appraiser to value the property higher. If you provide the appraiser with multiple similar comps to compare, you are even more likely to receive a different appraisal.
Question Adjustments That Weren't Made
Research the types of adjustments that an appraiser would normally make when valuing a home. These are usually desirable features added to your home, such as a front porch or swimming pool. Adjustments are changes made to the appraisal in light of differences between your home and the comp. For example, if your home is identical to another home, except with an additional tennis court, an adjustment would need to be made to factor in the value of the tennis court. Then, ask the appraiser why certain adjustments were not made. You may not understand under what circumstances certain adjustments are made, so it never hurts to ask.
To learn more, contact an appraisal management company like SettlementOne.