4 smart moves to challenge a home appraisal

for sale sign in front of a house.

Here's a nightmare scenario for anyone trying to sell a home: a deal-killing appraisal that shows your house isn't worth nearly as much as your sale price.

This is not an uncommon occurrence.

Each month, about 1 of every 10 real estate agents reports that low appraisals scuttled a home sale, according to the National Association of Realtors.

A low appraisal can lead to a canceled sales contract because lenders won't approve mortgages for more than the home's value.

But if you believe your home is worth more than the appraisal shows, what should you do?

Most lenders have a process for challenging an appraisal, says Bob Lear, a real estate appraiser for more than two decades. But you must be prepared to point out mistakes the appraiser made in comparing other properties or by missing new or upgraded features in your home.

Our 4 smart moves won't guarantee the outcome you're looking for, but they should help protect against honest mistakes.

After all, an appraisal is just the appraiser's opinion.

Smart move 1. Give the appraiser a reason to change opinion.

Appraisals by the Numbers

Source: National Association of Realtors

Number Explanation
76% Realtors who reported appraisals with no problems.
6% Realtors who said a low appraisal caused a sale delay.
9% Realtors who said a low appraisal led to a renegotiated sale price.
9% Realtors who said a low appraisal led to a canceled sale.

Too many people just contact the appraiser and say "you're wrong," says Lear, owner of Lear-Annoni Appraisals in Eden Prairie, Minnesota.

That tactic won't yield a new appraisal.

To get a second look, "you have to provide me different data — data that is different than the data I used," he said.

Read your copy of the home appraisal, then consider whether you can offer the single most persuasive item: new comps.

A "comp," in the real estate world, is a point of comparison.

The best way to know what a home is worth, the argument goes, is to compare it to a similar home that has recently changed hands. Adjust the price up or down to compensate for differences, and you'll know your home's value.

If a similar home in your neighborhood recently sold for more than your appraisal, especially if the sale took place after the appraisal, bring that to your bank's attention.

Smart move 2. Point out poor or missing comparisons.

Look at the comps the appraiser used. He or she might not know all the homes in your neighborhood that have sold recently.

The appraiser will only find comps if they're listed in the Multiple Listing Service.

If a home changed hands without ever being listed, it's similar to your home and it sold for more than the appraiser said your home is worth, then that's new information the bank and appraiser should see.

Short sales and foreclosures can also throw off appraisals of similar homes.

When you bring this to the appraiser's attention, you might say that this comp was a distressed sale or that, yes, the house down the street sold for less, but it had no plumbing.

It's tough to find comps for unique properties. If your property is unlike the others in its neighborhood, look at the comps the appraiser used. Are there other comps that are arguably more appropriate?

Lear recalls a duplex in Shorewood, Minnesota: "We did the best comps we could, but the bank needed a comp with the same square footage and the same bedroom number. Those didn't exist in Shorewood, so the bank accepted comps from a different suburb."

That could be grounds to dispute an appraisal.

If properties rarely change hands in your neighborhood, that's another potential problem.

Comps should be properties that have sold within the last 90 days. If your appraiser used older comps, you may be able to show that the market has changed.

Smart move 3. Highlight the changes you've made to your property.

An appraiser might not have noticed your home's new or upgraded features: a new kitchen, redone or additional bathrooms, updated decor, updated roof, new furnace, updated central air conditioning, finished basement or new fireplaces.

Point them out.

Richard L. Borges II, immediate past president of the Appraisal Institute, a Chicago-based industry group, says appraisers often find it handy to have the owner present during a review of the home because it lets them ask questions and get them answered right away: How old is your roof? How often do you have to have your septic system serviced?

If you aren't at the home during the walk-through, leave a letter detailing all you've done to your home.

If, after the appraisal comes back, you see that the appraiser missed some of the changes you've made, let the lender know.

Remember, though, that "the cost of new and upgraded home features rarely equals value, unless something is at the end of its life," Lear said. "I appraised a home for a gentleman who was transferred six months after he bought the home. He remodeled the kitchen during that six-month period and sold the house for what he paid for it, plus the entire cost of the new kitchen. The old kitchen was from the 1960s, and the house was in an area that was becoming very popular."

Smart move 4. Seek a second opinion.

You can attempt to sway your lender to revise the appraisal by getting one on your own.

Lear remembers being hired by a homeowner seeking a second opinion on the appraisal of his home in Edina, a Minneapolis suburb.

Lear found problems with the home's appraisal and sent his notes to his client's bank, seeking to have the initial appraiser issue a revision or for the bank to order a new appraisal.

"That appraiser compared the client's home to six homes in Minneapolis, St. Louis Park and a completely different neighborhood in Edina," Lear said. "Not one of those is near this house. These are terrible comps."

Getting another opinion doesn't guarantee success, but it worked for this homeowner, Lear says.

In the end, you may or may not be able to get the value changed. The appraiser has to answer to underwriters, so they're not very willing to change values.

Selling a home and buying a new one? Check out current mortgage rates.

  • SissyO

    This VA dude appraised my house for $25k less than a conventional appraiser 6 months ago. When I asked him to reconsider because the other properties did not back to the 17th T (only 8 in the whole neighborhood do) he said my view wasn't a sweeping view and why did someone pay less than I was asking on the market at that time? Total asshole. I have requested a reconsideration of value. He's supposed to be a veteran. What a fucking sell-out. Also, probably just hates country club types like me.

  • SissyO

    That's not true. There are many factors you can use to appraise. If that were true, due to the loser foreclosures, nobody would get the true value.

  • SissyO

    Especially the VA loan appraiser system. $450 in VA? Lenders encourage before receiving the appraisal or them even showing up? Yeah, that instills a lot of faith in the feckless government system. Just more fleecing and degrading the veterans they are supposed to be supporting.

  • DA

    Greg. what if an appraiser values a property on false information such as the size of a lot. the lot is a combined 1/2 acre lot (unity of title) but the appraiser is appraising it based on the buyer splitting the lots up and building a second home. The lot is united as 1 lot and recorded with county and city. how can he carelessly support that information?

    • bakedpotatosoup

      Appraisers have to consider the highest and best use of a property. Obviously without analyzing a particular property and market there are a lot of factors that someone in a comment section can't properly take into account. So, it may indeed be a faulty appraisal in your particular case, or it may be that the highest and best use of the property is to split the excess land. Additionally, an appraiser can be asked to determine a value based on a hypothetical situation, such as the bank wanting to know the value if the new owner DID decide to do that. The simple solution in most of the cases I'm seeing in this thread is that if you think your appraisal was fraudulent or your appraiser was incompetent, submit the appraisal to the state board.

  • me

    The real question is what can be done to the "appraiser" who is screwing people over.Is there legal recourse or a licensing board or something to stop there shysters?

    • LW

      Yes, go to your states Appraisal Board and file a complaint. Enough marks against them, people will take notice. Even one isn't a good sign, they can lose their license and be fined. File a complaint.

  • tr

    We are going through this now, I live in San Diego, ca we had our home approved 29, 000 lower than then the home identical to ours. We have Solar panels installed and what is happening is the appraisers need to take courses in appraising homes that have renewable energy. We are trying to get it changed now but are having big problems. I even sent a copy of my contract showing I own my panels and value (20,000) and I have to find and send more info. My neighborhood is going to have this problem until education is done, so my neighborhood Council came up and wrote a bill got it passed and approved through Senate 9 renewable Energy bill AB1381). Now we have to wait for the Realtors Assoc. to train their appraisers. This will help a lot of people ,but in the mean time I have to fight.

    • Bob

      Solar panels are an eyesore. Many people wouldn't dream of blighting their home like that for a few AA batteries' worth of power (only on sunny days). It is better to think of this like a pool. Some people want them and some people don't; they do not increase your home's market value.

      • tr

        Well, you are the first to give a negative comment. So let me school you on Solar panels
        #1 your bill is lower and they are worth it my bill was 200.00 a month now it is 0
        #3 I'm not sure where you live, but here in California they do make home value go up because we are an energy saving state.
        #4 there is a bill in the Senate (AB1385), that issues that home owners get the correct appraisals on their property if they have Solar panels. LOOK IT UP
        Appraisers will have the opportunity to go for education with this Bill to give the correct appraisal.

        • Bob

          A few points that may help here:
          savings of $200 on a $20,000 investment require 100 months to break even. So this investment makes one cash flow negative for over 8 years; last average I read was that folks sell their homes after 7 years meaning this investment is unlikely to pay off for most homeowners.

          It doesn't matter what state you live in; the market dictates the value of your home. I stick to my guns in saying that a lot of folks don't want to see solar panels on their home. They are not attractive and I sincerely doubt that they will allow for recouping the full investment. Many folks who want them may wait for advantageous (to everyone but taxpayers) government policies subsidizing these investments; this may accelerate your break-even but also decreases the value of the investment (one may rather buy a home without panels and take advantage of such programs than pay an extra $20k for your home).

          Finally, the government re-education program for appraisers is frightening. If the government is stipulating that appraisers overvalue solar panels defaults will hit harder government entities, banks, mortgage insurers, investors, and others when they cost cannot be re-couped through the foreclosure process. It is this sort of government meddling that will set the stage for the next housing crisis and hurt all of the folks employed by the entities I mentioned above, all taxpayers, and especially homeowners.

          By the way, I do appreciate the civility of this discussion and I don't want you to believe that I am pushing back on this point to be argumentative. There are many folks who may see things the way I do and not see solar panels being valued at their cost to the average homeowner.

          What I will say is this: the person trying to buy your home felt it was worth what the offer price was and that should hold substantial weight. For them to make an error of the dollar-value magnitude you described, with the advice of their real estate agent, there would have to be some substantial factor not considered during the course of your deal. I do not believe the answer is the solar panels, but some appraisers may fail to properly weight the evidence in front of them indicating the market has worked the way it is supposed to.

          • chuckasaurus

            Not only are solar panels hideous eyesores and a terrible, pie-in-the-sky "solution" to long term energy, solar panels negate the warranty of the roof unless the roofing system and the solar array supports were designed together (meaning an engineered system designed and built specifically to house solar panels and the infrastructure). I have yet to see homes retrofitted with solar panels do a total tear off of the roof and engineer built in supports that work with common roofing materials. The solar panel "contractor" is not a roofer and simply slaps some sealant/caulk under the supports and screws the panel supports to the roof, creating numerous breaches in the roofing barrier. No roofer or roofing material manufacturer is going to honor a warranty after another "contractor" drills holes through their work. If your roof needs replaced in 5-10 years or experiences catastrophic damage, how much is the $200 electricity savings going to offset the $10,000 - $26,000 cost of a new roof (that is no longer covered by warranty, if it had one) AND the additional cost of removing and reinstalling the solar panels? One massive hail storm and all the money saved may a well been flushed down the toilet.

  • Joel

    You need to understand that what you see as sqft is not what the way it is calculated or compared. Anything above grade is calculated and compared separately from basements. Also, amenities such as porches and garages are not included in sqft. This allows for more accurate comparisons both on a sales comparison and replacement cost analysis. This is a highly regulated industry that is accountable to banks, federal govt regulations, and state govt regulations. The way they are laid out and calculated is for underwriters and the uniform appraisal database to understand and will not make sense to most people not involved specifically in the industry. Realtors are great at showing a home and marketing but are (in my market) historically bad at understanding what a home is worth. I say that as I am both an appraiser and a broker. Remember, the appraisal is for loan security and by nature is going to trend on the conservative side of error.

  • Joel

    Sounds like an FHA. The home owner is ultimately responsible for securing access to crawl spaces and attics. If the appraiser didn't see it, that's sort of a two way deal. Also, the appraiser is not a home inspector and is not to test mechanicals. They are to observe if they are operating. If it's cold, you don't want them operating an AC unit as it could do damage to the unit. I don't know why you're expecting an appraiser to do what only a licensed inspector does.

  • Joel

    C4 also applies to homes that are aging and may have some outdated components. Regarding being on a main road, that is something that should be considered but not in place of location. Locality of your property is one of the most important assets that a buyer will look at and should be relevant to the appraisal.

  • Joel

    I would look for differences in lot size, amenities, foundation, and garages as those will cause varied price per sqft.

  • bronxron

    what BS...I had appraisal for refi with Quicken loans...the appraisal came back 100 grand less then going sales....I even sent comps to justify...quicken did nothing...I lost out 450 plus in the 3's rate...I wound up with another mortgage company house apprased as I thought 358k I was able to get some cash out but loan in 4's..now my credit rating went down because of looking again thanks to quicken and do they care nooo if your getting a loan get all the facts I even had a truth in lending statement.....soo this other company Perennial mortgage I stated how I had such issues with quicken they found me a loan I had to pay another 450 this is 3rd time because rates dropped again I want it in the 3's....they got a loan and I noticed it was from quicken loans...I said I told you how I felt about quicken she insisted this loan is outside of quicken they are just the originator..and that perennial has a lot of say....the appraiser came and said hi I'm from quicken loans...my wife almost slammed the door..lol...anyway this appraisal came in at 350k and I was ok with that....then I had the loan officer go on vacation never letting me know...then I had her tracked down in florida and she insisted everything is a go...the rate 3.75...so I get loan at 4.25 higher then my 4.12...they say its because my salary was broken from 60k to 55k and could not count guaranteed bonus which was in taxes with track record as income...this should have been known from the start...so now I am out another 450...appraisal fee and truly feel like I need some recourse...I played by the rules and wasted months with liars and cheats....plus as an added bonus my credit went from 740 to 706...that's just from these running credit saying oh it wont effect your rating...well guess again it does and another thing they have ratings when your looking for motgage..poor good excellent then after you give info and you see your rate makes excellent it changes it goes poor good very good excellent making a new level which cuts you off off advertised rates...anything in financial industry these days seems like you better NOT trust any broker and outfit...and if something isn't right or your instincts tell you something isn't right get out......truth in lending does not mean truth in lending....and appraisal reports you pay for which are held to such high regard are not even trusted by other banks....so the way I see it is they are all ripping off and know it so they don't even trust themselves or appraisers...and that's a shame....oh the icing on the cake..i got a late Friday email it came from quicken loans thru perennial...it was a readjusted mortgage..it wasn't as good as id like but it would work...I called pereniial..they said that was a mistake that should not have gone out....what do you think? I say they should honor it and quicken loans should refund one of my appraisal fees the one they ordered and came back 100 grand low like 256k...and yes it was comps but cpomps used were shortsals flooded homes and bad area my area had comps that were right on....we even got the listed sales and sent them to quicken who said they sent them to appraiser but he stood his prideful ground...well like I said I had 2 arraisals done after one only a month later and came in at 358k...so this is what a consumer is up against...and its truly sad...im all for living in a tent on land...too bad my wife isn't lol lol

    • bakedpotatosoup

      It sounds like a nightmare, and I'm sorry you're going through all of that. I will say that I've seen in this thread a couple of times the point that banks won't use appraisals done for other banks as an indicator that appraisals aren't trustworthy. The truth is that an appraisal is specific to a client. Appraisals can be transferred from one lender to another, but that must be handled between the lenders and meet additional criteria, and is extremely unlikely. Similarly, a regulated lender cannot allow the borrower to provide the appraisal or choose the appraiser.

      • Angela Evans

        First, one reason this was put into place is that people were taking appraisals and shopping loans. We have to state an intended user and use on every appraisal and the stated users are the only ones that have the right/access to the appraisal. This is per USPAP and we must follow it. Only the person/company that engaged the appraiser has the right to the appraisal, even if someone else paid for it. Before the downturn, homeowners were taking the appraisals and shopping loans. Appraisals were being changed to make loans work without the knowledge of the appraiser. Someone then gets a hold of such an appraisal, which is now fraudulent, and realizes there are issues with it and turns the appraiser into the board. What happens to an honest appraiser that must now defend himself against a fraudulent appraisal that changed after they sent it to their client?

  • bronxron

    the worst thing is we really have no recourse....the appraisers word is what they go by...yet another bank wont honor it..which kind of means to me the appraisers word is the appraisers word unless another bank is asked to honor it...and to me 450 for an appraisal is money I just don't have....a new mortgage place that sent me info has a 695.00 appraisal rate...says I will get back at closing...I don't think so....first get back means its rolled into mortgage and id be paying interest for 30 years on it..lol but 695..i thought 450 was high....I think there should be an arbitration court...I mean I have 1st appraisal 256k second 358k 3rd 350k...one stands out and I deserve my money back

    • bakedpotatosoup

      Ask them how much of the 695 or even 450 actually goes to the appraiser.

  • bronxron

    that's horrible I have been thru this still going hru this stomach in a knot...I don't trust them yet I have to pay 450 and have good chance of wasting it...I am by no means rich...I am what used to be considered middle class..except I don't think there really is a middle class anymore...if I made less money id have more options...if I made more money id have more options...im stuck in the middle not meeting anyones terms just missing them...and do not belive that your credit score wont go down..they call it a soft pull...lol well mine went from 740 to 706 and I didn't look ir get any credit other then mortgage companies checking it.

  • Anthony-Keri Kilmer

    We are in the middle of this right now. Appraisal came in at almost $27,000 less then purchase price. My husband went through the appraisal with a fine tooth comb. Doesn't fly with us. The bank is in on fixing this along with our mortgage broker. This what was wrong: He used houses for comps that were not the same style or even close to the same style, he fudged the mileage on the comp houses, they were further away then stated on report by 2.5 miles or more, he missed the pool (said there was none), he said we have no gutters, clear as day there are gutters with adequate run off, said there was no attic, didn't count the four seasons room as square footage of home (room is insolated, new floors, has heat and central air and a fire place ), said we didn't have a deck (huge deck with a wrap around wheel chair accessible deck), said we had bottled gas when we have public, said we have individual for ac when we have central air, counted family room and one bedroom in finished basement but didn't add to square footage of home, counted the shed as dwelling (lol) and he missed adding in all of the upgrades, new wood floors, new carpet, new tiled bathroom, added heat and central air to garage, new windows, new oven, fridge, cooktop, sink and upgraded plumbing, added French doors,gutted room off kitchen with new walls, wiring flooring, lighting, new window and door and kept hookups from dryer and washer. Appraiser is going "back" to the home today (don't think he went to begin with ) and if it still comes in at the same price or way under value, the appraisal company is giving us a free second appraisal. Hows that for messed up???

  • LW

    Had appraisals done one year apart with $70K difference between them. The 2nd one was lower and the first one was used to get the mortgage. Don't know which one is negligent, but filed a COMPLAINT with the State's Appraisal Board and the Attorney General of the State responded. Everyone who is experiencing problems should file a complaint with your State's Appraisal Board, so licenses can be voided. It's unfair and seems like a scam - which it is. Next step is to sue the Appraisor(s). Be sure to file a complaint, at least it is a heads up to the Board and they can see the scamming.
    Good luck to everyone, it's a horrible situation to be in....

    • Anthony-Keri Kilmer

      I agree. My post is above. They sent to same appraiser back and he only went up $5,000. So our mortgage broker and kindly paying for a rushed second appraisal that the bank approved. Thank goodness.

      • bakedpotatosoup

        I am glad that things worked out for you, and I hope that you got a solid appraisal and a good value on the home that you were purchasing. I would like to caution others, though. It's not always a good thing if you get a solid appraisal and it is short, and then suddenly the people that are making money from the sale are able to produce a second appraisal that makes things go through - especially people that don't have any investment or risk, like mortgage brokers or real estate agents. Please don't misconstrue what I'm saying, most are ethical, professional, and intelligent, but like appraisers, there are some that are not. The question you have to ask is what does the appraiser gain if the sale completes or if it falls through? The answer is nothing; the effort and compensation is the same in either case. There is zero benefit to an appraiser in low-balling a value, and often, even accurate values that are lower than contract or refi need result in a lost client. Compare that to the buyer, seller, real estate agents, mortgage brokers or loan officers, and lenders, who all only benefit if the sale closes.

  • Paul Francis

    It's basically a big Ponzi scheme, bank rep says they cannot communicate with appraisers, while the CEOs of banks, appraisal firms, and credit ratings firms all play golf together and wine n dine. Meanwhile, they are low balling people making impossible to shop for a better rate, and forcing people to pay PMIs. The criminals blew up the economy in 2008, and we are all STILL paying for it!

    • jeffm

      I know most of the appraisers in central Connecticut and I don't know the "appraisal firms" you are speaking about. I've been an appraiser for 26 years and I haven't played golf or wined and dined any bank rep, ceo or credit rating firms.

      You should understand that if your mortgage is approved, you are on the hook for 15-30 years and what lender wouldn't want that business? Why would there be a scheme to low ball you? So silly....

      • Paul Francis

        Sorry brother, but it's more complex than that. It's industry wide, and it's a well know fact that bank CEOs, Credit agencies' CEOs and Appraisal agencies, are all in bed together. If you're an appraiser and all your friends are appraisers, then of course you're going defend the special interests of your affiliation. The bailout cost the US tax payer $14 Trillion. The banksters and corporations got most of that money, off shored it, and no one went to prison. The outcome was: more centralized power in the banking industry and financial sectors, yet people who have good credit and plenty of equity still cannot get fast tracked on their REFIs. Have you forgotten in 2008 the auditors/appraisers had rated firms (AIG Lehman Bros) with AAA ratings? Less than 2 months later those firms were bankrupt by Billions!
        Have I painted a clear enough picture for you? People really really need to wake up and start connecting the dots- If you do not understand what I've explained here, I'm sorry... then you don't understand anything!

        • jeffm

          Your painting is not clear, its broad strokes for sure. You assume I'd defend my industry above my conscience and moral, that's not the case. I'm not denying the majority of your post. Appraisers simply cannot be in collusion to make deals work or not work. Appraisals are subjected to peer, software, underwriter, gov't agency reviews. I do not know of one appraisal firm that was ever mentioned in the 2008 crisis or that has been tied to any collusion, that is simply a fabrication. I'm not saying there aren't unethical appraisers. I'm saying it's impossible for it to be industry wide.

          I'll say this - if lenders didn't approve a mortgage for everyone who applied and could not pay it back and faulty mortgages weren't sold worldwide making bankers and investors filthy rich, we wouldn't have the crisis of 2008 and the tightened credit now. It had nothing to do with appraisers saying a house listed for sale for $500,000 and selling for $490,000 was worth $491,000.

          • Paul Francis

            Sorry Jeff, I'll partially disagree with your last statement. The 2008 global crash had very little to do with mortgages being approved for people who possibly couldn't afford them, that is the false narrative that the corrupt banking industry wants you to believe. The crash was caused by lying and cheating and forging numbers and documents on a corporate level, creating billions in assets that simply did not exist. Invest firms such as Goldman Sachs and Lehman Bros were fabricating hundreds of billions of non existing capital, they kept manipulating their profit loss statements, for years until they could not push it anymore. The after effect was millions of people loosing their jobs, their retirements, their savings, eventually their homes. Instead of homeowners getting help -Wall street and corporations received Trillions to shore up their criminal activities. It essentially was an upstream redistribution of wealth. I suggest you read Thomas Piketty's book, Capital in the Twenty First cent. and also see Charles Ferguson's Doc. Film, Inside Job.

        • bakedpotatosoup

          Wait, you think that your local home appraiser is responsible for determining AIG and Lehman Brothers' Moody Credit Rating?

          I'm very curious what special interests of residential property appraisers you think have been granted.

      • Mad Bill Craft

        I've been wanting to tell you sack of shit appraisers in central Ct. for a long time now that you are nothing but sanctioned fuckin criminals. Worse than used car sales people. My refi just got tanked because of glaring errors, i.e., you missed the new energy efficient windows, new insulated siding, updated electrical, etc. even as I pointed them out to you. And, you still appraised my house $20k less that exactly 1 year ago. And, you used a seasonal 1 br., .3 acre, no heat, no insulation camp down by a lake as a comp to my 3 br. .8 acre updated everything house. All you appraisers suck. A 10 minute walk thru is not worthy of any appraisal. How you assholes live with yourselves is amazing. My next course is getting together doc's and working with our real estate atty. to see that at least 1 of you gets you license removed. Fucking morons, you are the ones now abusing the system, cheap easy $500.00, and you walk away, regardless of what your opinion of the day is.

        • jeffm

          $500 + real estate attorney cost versus ask your lender for a reconsideration of value (which is free).

        • bakedpotatosoup

          Those dastardly "central Ct." appraisers surely find this to be quite the stinging rebuke from a respectable scholar such as yourself.

  • Jim

    I had a contract on my house and a good appraisal in Wisconsin and moved to Florida June 2015 to close on the house. The Closing got extended, than fell
    through. Through two more contracts the house no longer appraised out. How can it be explained that the first 2 appraisals with the first buyer appraised out at $235K, but the last 2 appraisals only came in at $185K? Main difference I see is the first 2 were local appraiser who used the realters comps. The last two were out of county and both REFUSED the realtors comps! And then things got worst: Tried to short sale with Wells Fargo but they refused. The house sustained $80,000 to $100,000 in water damage from frozen burst pipes. Insurance refused to cover. Tried to short sale based on the damage. Wells Fargo refused to short sale and opted for Foreclosure. Now I'm screwed for 7 years. I'll be 59 before I can buy another house!

  • Paul Francis

    "It was that thinking that blew the bottom out of the housing market!" LOL!!!! greg, you are either a paid troll for the banking industry, or completely out of your mind with that statement. What actually blew the bottom out of the market, and the entire economy, was criminal practices by the bankers and investment firms on Wall Street, millions of people lost their jobs, which led to the housing collapse. It's as simple as that! If these individuals had not engaged in unlawful business practices the housing market and our economy would've continued t thrive.

  • Paul Francis

    Right on the money John! Those of us who realize the foogazy of it should gather together and form a legal defense fund, and fight this corrupt system!

  • Paul Francis

    Most of the regulations are in place to protect the corrupt banking industry and those special interests surround it. NOT the home buyers. If you can't see how corrupt the system is... then that is really sad, sorry man.

  • John Newell

    I agree Bill about the rules appraisers have to follow. To the hilt. But none of it matters in the least when the appraiser is called into the bank and told what the number is he can appraise said house at. MY house for instance. That appraiser went through my house almost at a gallop. Missed three rooms and completely misidentified the neighbourhood among many other things. What the appraisal described wasn't my house.

    I went to see the bank manager afterwords and she confirmed all of my suspicions. What falsehoods are you talking about?

    • Zora

      I'm obviously not from your area so I can't comments as to the local practices there. But "when the appraiser is called into the bank"? I may NOT have direct contact with my loan officers or processors - via text, email, phone, and sure as heck not in person! Hell, I haven't physically SEEN a client since 2007! Every state has a Department of Professional Regulation which holds appraisers accountable; the State of Illinois in fact publishes the names of this found in violation of the gazillion rules and regs we follow! If you have a "bad" appraisal, PLEASE submit it to the state board and let them figure it out! This is NOT a free for all and those of us doing this as a career are grateful to see those not doing their jobs lose their licenses. Good riddance.

    • Katies In LA

      Dude you are living in the dark ages. Appraisers dont get 'called into banks' and they are not given any numbers to hit - you are dillusional

  • J.a.J

    Ha ! Check out the market in Denver, Colorado 2017..........

    • elemcee68

      I'm in the Denver area and just had my house appraisal come in $15,000 lower than the sale price in a booming area. Ridiculous. I have scoured the appraisal
      pretty thoroughly. The appraiser is leaning on his Comps 1 and 2. His Comp 1 sold about 6 months ago for what he appraised our house for and has less sq ft in terms of living area and 1 less bedroom, and is 4 years older. His Comp 2 is a completely different type of house with siding all the way around where ours is all stucco and different style, 2 car garage compared to our 3 car, 200 less sq ft of living space, 1 less bedroom and 2 years older. This guy’s insane. His other comps are much more in line with our house and should have more sway on value. Those would easily put us where we need to be.

  • Diana

    Real Estate is an environment of crooks and manipulators just like small rural police/judicial environments.
    Never have your own Buyer's Agent. They do not negotiate down, they negotiate for themselves. Stop signing long contracts for listing your property and have multiple sales people give you their working methods.
    This environment really needs to be CORRECTED.
    Agents aren't interested in getting you the right price for your property, just the fastest quickest sell for their commission.
    Agents hide properties now, they do not list properly, they fake pictures, they hold off buyers so they can reduce your sales price every so often til their friends can afford your home.
    Just LOTS of corruption among agents/agencies.

    • Diana

      I live in an area where 1 popular neighborhood is Italian...try and get an agent on the phone to show you a property in there if you are not Italian and/or have an in with a friend of a friend. They list w. a few small Italian Agencies that will never return your calls.

    • ny1

      The fact alone that they will take tens of thousands of dollars from you for the sale of the house that you put hard equity in is outrageous in itself

      • bakedpotatosoup

        If you don't think you need an agent, don't use one. Most people in most markets benefit from the use of an agent, and at the end of the day, make the same amount as they would have made without one, minus the headaches.

        • ny1

          I dont thanks

    • bakedpotatosoup

      Why wouldn't someone have a buying agent? Which has more opportunity for corruption, a lazy buyer's agent or a selling agent tasked with also helping the buyer? It costs the buyer zero dollars to have their own agent and also does not cost the seller any additional percentages. The buyer needs someone that is responsible to them and is at risk of losing their commission if those needs aren't met. In many states it is straight up illegal for one agent to represent both sides of the deal.

      • Diana

        Unless the Seller is PAYING ALL Commission Fees...then you are paying for your Buyer's Agent and his Broker.

        • Diana

          How do you think your Buyer's Agent/Broker makes their $...

  • Diana

    Also...The Home Inspection Market is also corrupt. I wrote a contract on a home for a couple & I wanted them to use a really great WOMAN run company...I had seen this woman crawl into crawl space that would've caused me a heart attack. My couple wanted to go with an ABC Company a county over...which often is a good idea.
    Anyway...bottom line, this guy wrote this house a CLEAN bill of health. While we were doing a walk-through...I noticed a crack in the furnace. Couldn't get the contract rescinded, couldn't get this ABC CO on the phone...I finally silently, because of 2 small children moving into that house, went to the city building inspector...he came out for a random code inspection prior to going to closing & indeed cited the furnace...The owners had to install a new furnace prior to selling, a cost of 5K...and my buyers didn't have to pay & or move into a potentially dangerous situation. GO THROUGH A HOUSE w. your inspection team & take your own video.

  • Lamar Carnes

    What is crazy is that when a lender gets the appraisal and o.k.'s it even if it was lower than it should be, they will always want a Insurance Police for replacement cost and that replacement cost to rebuild the home from scratch is going to be a lot higher than any appraisal done by an appraiser. Ask the lender and the appraiser if that appraisal is replacement cost value as shown by insurance firms for this particular house. If so, then that is the REAL VALUE of the home and not what others are selling for in the area at all. We need to see a big change in the appraisal system in this country. They are way off most of the time. I mean the lender and all concerned, buyer and seller, should want to sell the house at least at the replacement cost and no less. Selling over that amount to me isn't really wise as a buyer unless they don't care to spend extra money just for the desire of the home being considered. But we are speaking here only about the REAL value of the home being mortgaged and this isn't being considered in the appraisals. My 1 year old home was recently appraised at several thousands of dollars less than I paid for it and that the VA appraisal was when I purchased. The appraiser just didn't care about all of the upgrades I made and the land developed for living on the site at all. I threw all of that out and even went lower than the original VA appraisal. Can you believe that? My new home was more like a car or a mobile home - it went down in value according to this appraiser.

    • bakedpotatosoup

      Cost does not equal value, but there is some merit to what you are saying. Appraisers are supposed to at least consider the cost approach to value which is the land value plus the replacement cost of the improvements, minus depreciation. That last part is key, otherwise a 50 year old house that has not been updated would be the same as a house of equal size that is 5 years old. Still, that doesn't necessarily equal the most likely price that a potential buyer and seller would agree upon, but it is a piece of the puzzle.

  • Krystal Needles

    I am an actual, qualified, mentally sound appraiser of 20 years and this article is RIDICULOUS!!! Other than getting a second opinion, the rest is garbage. What an insult to trained professionals. If the house you are buying 'doesnt' appraise' then THANK your appraiser for keeping you from being ripped off and underwater on a mortgage for many years to come. We are the only UNBIASED party that gives the truth and not just hit a number so we can cash a commission check based on the deal reaching settlement.

    • Diana

      UNLESS, you are in a community where the APPRAISERS are getting Kick Backs and a larger REFERRAL BASE because of Preferential Treatment.
      ONLY if Appraisers were placed into a LOTTERY Type of System can REAL LACK of BIAS exist.

  • bakedpotatosoup

    If the effective date of the appraisal changes, that is a new assignment. The appraiser must consider any property changes, market changes, and additional sales and listings since the previous appraisal. Some appraisers may agree to a lesser fee due to the repeat business and the head start on the research, but it IS a new assignment per Uniform Standards of Professional Appraisal Practice (USPAP).

  • bronxron

    Your missing the point. An appraisal is supposedly done by a licensed expert. In that case the appraisal is a legal document. That should be able within a few more nth so he accepted by any bank or broker needing an appraisal to cover the deal. the appraiser should have to be responsible for any fraud if any found but if you pay 300 for an appraisal and I had 3 appraisals done in 6 months with 100 grand discredit And so t lol me it's not a scam from the start? Some said they don't accept appraisals from a town house borders yet some others do and should have if homes are similar and at approx same value

    • bakedpotatosoup

      It sounds like the issues at the end of your post are with the lender, not the appraiser. It's the appraiser's job to provide a credible value opinion that is supported by market data. If your selected lender doesn't lend on townhouses, that has nothing to do with the appraisal.

      The truth is that an appraisal CAN be used by any lender, provided that they are willing to use an appraisal in another lender's name. The problem is that most lender's want the appraisal in their name, so they don't bother making the effort to obtain the appraisal from the prior lender. Many lenders have their own guidelines regarding how long an appraisal is valid, as well as FNMA and/or FHLMC guidelines. When they say that something isn't valid or can't be done, often they are talking about their own company guidelines rather than industry legalities.

      Typically you shouldn't see that wide of a variance between appraisals, but it's also not impossible that all 3 are valid. It's an expert's opinion of the value. They are tasked with supporting the credibility of that opinion with market data. If you have an atypical property or are in a market where activity is not uniform, there could be circumstances where 3 different experts can arrive at different conclusions.

    • Katies In LA

      Please explain to me what is in it for the appraisal to 'scam' you? Seriously, I am reading these posts and I am horrified at the level of stupidity that is out there.

  • Ellen Anderson White

    Same story here - on a refi with cash out. Had an appraisal done in Dec 2016 that came in at 376,000, and did a refi but didn't get cash. Now I want the cash. June appraisal 325,000, which doesn't get me the amount of cash I want. Refused to accept it, also ran into the 450 for first appraisal, second one was 685 - but that came in at 387,000. But wait, after all said and done, the lender said they cannot use the second appraisal after all - because "it was recorded" - I cannot find any information on what that means. They say it's a government thing - Big Brother was the lending agent's term. The offered to refund the 685, give me some of the cash I want now, and get the remainder in 6 months after the "recording expires" - without charging for a new appraisal and guaranteeing the same rate. I cannot believe a bad appraisal has such power. And I really want to know what this "recording" means!

    • bakedpotatosoup

      Maybe you should ask your lender to spell it out for you, including where you can read up on the regulation yourself. If they're not willing or able to do that, maybe the appraiser isn't the problem. Ultimately the appraiser is not the one lending or not lending you the money. They are giving the lender an opinion on the value of the collateral. The lender can then make any decision that they want. Certain loan types, like FHA, do have regulations that control how long an FHA appraisal remains in the system. If that's the holdup and the lender thinks the 2nd appraisal is more credible, just do a conventional loan instead. Or wait a few months. Or blame the appraiser for something they are not responsible for.

    • Katies In LA

      All appraisals are sent to FNMA and FREDDIE. If the first appraisal had no material deficiencies then the lender actually violated Federal lending regs by ordering a second appraisal which is known as value fishing.

  • John Reno

    If people really knew anything about valuation and real estate we would not have had a bubble and than the crash. You all think you know something and you do not . This is very simple folks . If the appraisal was so bad hire an appraiser (one with integrity) to do one and show him the one you got . If the first one is so bad you can challenge . But it needs to be understood the original appraiser gets an opportunity to review the new one. Yes , this costs money , but if you are right you will get your money back . Unfortunatly you are all ignorant . Yes you can find minor errors in a report . Those errors have no effect on the process . But keep shooting your mouths off , you idiots.

  • Jerry Campbell

    Yes, my appraiser shorted me 1 bedroom and did all comps east of my house where the real estate values are lower how about a 100,000 thousand dollar lower value then Zillow, Core Logic, or Trulia. I fill like choking that lady.

    • bakedpotatosoup

      It's important to note that Zillow and Trulia are the same company. Like CoreLogic, they use a proprietary method that is essentially the average of sales and listings in your market, without consideration of view, condition, and other factors. If sales and listings in your market are uniform and plentiful, they will be quite accurate. In any other scenario, significantly less so.


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  • Paula Ann McCabe

    There was probably a reason the appraiser didn't use the sales next door; A) they may not have meet guidelines, such as occurring too long ago, etc., B) particularly features of your home were not represented by those sales, such as bath count, lot size, a guest house.

    This of course does not preclude the possibility of a poor report. Every field has good and bad.

    Was the appraisal from two years ago an overvaluation? Is a home built in the 1920 with good architecture and condition worth less than a 70's home? These are opinions that you have but, that can be different from what the numbers show. Most people just don't like the estimate and then work their way backwards from there to fault the appraisal.

    According to Congress, the loan expenses are the lender's. The lender may in turn collect from you to recoup its expenses and by law, it has to tell you what it is for and the amount. So consequently, when the lender says, "We need $XXX for the appraisal", it sounds like you are paying for it but, this is really the lender saying, "I had to spend $XXX on an appraisal so, I want reimbursed".

  • Paula Ann McCabe

    Let me guess, the value was below what you thought it should be?

  • UB2funny

    We need to fight to get these appraisal fees STOPPED. They are really a waste of time and money on small homes. Plus the way they charge you is insane. I paid $7500. for an appraisal in a loan that didn't work out, I changed banks and they require me to get a full appraisal again because the bank is the costumer and you just pay for it. Then you pay 1,700.00 to bank to review the appraisals. This is a scam and we need to contact our State Rep. As many fund raiser I have done for them I hope they will listen...

    • bakedpotatosoup

      There is indeed a scam taking place, but it is unlikely that the appraiser is the perpetrator. Once the appraisal is turned over to a client, the report document as well as any conclusions it presents are owned by the named client. At that point, the appraiser legally cannot give that appraisal to anyone else, as it is no longer theirs to give. However, if you choose not to go with that lender, the original lender can be obligated to provide the appraisal to the new lender. And yet, most new lenders will not want it as it may be nearing time guidelines for validity, and they prefer to have their name on the appraisal rather than the prior lender.

      Tell your bank to get the appraisal from the prior lender or you will find a lender that will. All they have to do is ask, and the other lender will turn the appraisal over to them. They likely want a new appraisal for 3 reasons: 1- so it is in their name and they can make demands of the appraiser (if they aren't the named client, they can't impose their own guidelines on the process, they can only use the existing appraisal); 2- as soon as you pay for an appraisal in their name, you have invested in them lending to you and are less likely to back out; 3- depending on when the appraisal is done and how long it will take to close your loan, it may be reaching a time threshold where it is no longer considered current.

  • Angela Evans

    We are the most regulated in the entire home-buying process and make the least amount of money. Having appraised during the S&L debacle and the current downturn, I have seen the hoops appraisers have to jump through while the agents, mortgage brokers and banks suffer no recourse. The banks failed the market during the downturn, pushing values and threatening appraisers that didn't make value with the loss of business. What happened to any recourse to them? Nothing, we bailed them out. The agents and brokers may a percentage on either the loan amount or the sale price, while appraisers make a flat fee which varies from market to market. In Atlanta, I make about $100 more an appraisal than I did in 1985, but the cost of doing business has changed since then, including the hundreds of dollars spend on continuing education and licensing every year. If you don't think it is enforced, then you are wrong. Just turn the appraiser into your state board. But remember, your agent or mortgage banker may be the one screwing you over.

  • Katies In LA

    Sorry - it is far more regulated than real estate sales or mortgage brokers. There are no 'instructions from the banks' the appraiser is given no information other than the address for refis.