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Low Appraisal, What Can I Do?

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Dougmla

Freshman Member
Joined
Jan 10, 2018
Professional Status
General Public
State
Connecticut
Hi,

So quick question, hoping to get some expert advice. We had our home appraised 18 months ago and it came back at $640k. We are now expecting our 3rd baby and was looking to get a heloc to add another bedroom to our home. We figured if our house was worth $640k we'd just be in that magic 80% LTV ratio the banks need. So we've gone thru the loan process, and just got a new appraisal and it just came back at $626k. I haven't seen the actual report yet, so I don't know what comps were used, etc.... BUT we are so close to the $640k, do I have any options? Anyway we could go back to the appraiser to reconsider? Again, I don't know specifics of the report yet, but was more just asking more knowledgeable people if you are $14k short of that magic number is there anyway to try and adjust it?
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
The difference between $640k and $626k is about 2%. Appraisals are based on (hopefully) the most recent and relevant data. Assuming no significant changes in the market, both appraisal might be highly credible at their points in time (in other words, they are both right). Even with a moderate 2-3% value increase, the difference in values are not so significant that it couldn't be explained by the differences in comparables available for each value date.

Having said that, here is a link to an article which discusses what is called the Reconciliation Process (at least from one appraiser's perspective! ;))

http://www.bayareaforsale.com/artic...sal-interview-denis-desaix-metrocal-appraisal

Good luck!
 

Dean

Senior Member
Joined
Oct 16, 2003
Professional Status
Certified Residential Appraiser
State
Tennessee
Hi,

So quick question, hoping to get some expert advice. We had our home appraised 18 months ago and it came back at $640k. We are now expecting our 3rd baby and was looking to get a heloc to add another bedroom to our home. We figured if our house was worth $640k we'd just be in that magic 80% LTV ratio the banks need. So we've gone thru the loan process, and just got a new appraisal and it just came back at $626k. I haven't seen the actual report yet, so I don't know what comps were used, etc.... BUT we are so close to the $640k, do I have any options? Anyway we could go back to the appraiser to reconsider? Again, I don't know specifics of the report yet, but was more just asking more knowledgeable people if you are $14k short of that magic number is there anyway to try and adjust it?
Maybe see the report first before you do anything else?
 

Rich Heyn

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Michigan
The difference between $640k and $626k is about 2%. Appraisals are based on (hopefully) the most recent and relevant data. Assuming no significant changes in the market, both appraisal might be highly credible at their points in time (in other words, they are both right). Even with a moderate 2-3% value increase, the difference in values are not so significant that it couldn't be explained by the differences in comparables available for each value date.

Having said that, here is a link to an article which discusses what is called the Reconciliation Process (at least from one appraiser's perspective! ;))

http://www.bayareaforsale.com/artic...sal-interview-denis-desaix-metrocal-appraisal

Good luck!
Great article, Denis.
 
D

Deleted member 128537

Guest
One thing that you could do is to provide a comparable sale that would justify your higher value. Often when appraisers get a reconsideration of value no information is provided to the appraiser other than "I don't like your opinion." That seldom works. I have changed values because I didn't know of a sale that had occurred in a market that didn't have many sales to choose from. Most of the time the comparable may not change the opinion after adjustments are made. But appraisers don't always have all the information, and if you know of a For Sale By Owner that sold that can make a difference in some markets.
 

norapp

Member
Joined
Jul 11, 2016
Professional Status
Certified Residential Appraiser
State
New York
The difference between $640k and $626k is about 2%. Appraisals are based on (hopefully) the most recent and relevant data. Assuming no significant changes in the market, both appraisal might be highly credible at their points in time (in other words, they are both right). Even with a moderate 2-3% value increase, the difference in values are not so significant that it couldn't be explained by the differences in comparables available for each value date.

Having said that, here is a link to an article which discusses what is called the Reconciliation Process (at least from one appraiser's perspective! ;))

http://www.bayareaforsale.com/artic...sal-interview-denis-desaix-metrocal-appraisal

Good luck!
Very good article. Permission to use??
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
Thanks, Rich! (good to see you post)
norapp said:
Very good article. Permission to use??
Permission to use, with full acknowledgment, also?
Thanks guys!

You (and anyone else) certainly have my permission.
I don't recall if there are any restrictions from the specific site, but I'm sure with reference to their site they'd be fine.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Hi,

So quick question, hoping to get some expert advice. We had our home appraised 18 months ago and it came back at $640k. We are now expecting our 3rd baby and was looking to get a heloc to add another bedroom to our home. We figured if our house was worth $640k we'd just be in that magic 80% LTV ratio the banks need. So we've gone thru the loan process, and just got a new appraisal and it just came back at $626k. I haven't seen the actual report yet, so I don't know what comps were used, etc.... BUT we are so close to the $640k, do I have any options? Anyway we could go back to the appraiser to reconsider? Again, I don't know specifics of the report yet, but was more just asking more knowledgeable people if you are $14k short of that magic number is there anyway to try and adjust it?

Unfortunately appraisers are not hired to hit a magic number...,(but you know that...I do understand your point though.

It is a difficult question to answer because we can't tell whether the 640k prior appraisal was "high" or not- I see this frequently, a homeowner had an inflated value appraisal done (, even if by a few percent ), then later the HO wants to refinance and becomes upset because the next appraisal is "lower". While appraisers are supposed to opine market value in an unbiased manner, some appraisers make it a mission to appraise high in order to "help" a deal...

It is rare for an appraiser to deliberately appraise "low" ...( but anything is possible) . Of course we can't speak to the competence of either appraiser or quality of either appraisal..

It is possible the market has changed- I am seeing in my market prices were higher a year ago due to interest rates creeping up. Markets change which means the trends and prices change which is why lenders typically order a new appraisal after 6 months. Most lenders will allow a borrower to submit sales or "comps" of a home the borrower thinks might be considered- you can always try that and see what happens.
 
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