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How to Challenge a Low Home Appraisal

Common mistakes on appraisals include incorrect square footage, the wrong number of bedrooms and bathrooms, and errors in the comparables used.

When you are refinancing your home, an appraisal is a key part of the process. Unfortunately, if the appraisal comes in lower than expected, it can throw a wrench in your plans. The good news is there are ways to challenge a low home appraisal and get a more accurate valuation for your property. In this article, we’ll discuss the steps you can take to challenge a low appraisal and get an exact value for your home!

Common Reasons for a Low Home Appraisal:

The Appraiser Used the Wrong Comparable Sales

Comparable sales are one of the most significant factors determining your home’s value. The appraiser will look at recent sales of similar properties in your area to estimate your home’s worth. If the appraiser uses comparable sales that are not similar to your home, it can lead to a low appraisal.

For example, if your home is a four-bedroom house and the appraiser uses comparable sales of one-bedroom apartments, the appraised value will likely be lower than it really is. Or, if the comparable sales are of homes in poor condition, it will again lower the appraised value of your home.

The appraiser Didn’t Consider All the Improvements You’ve Made

Another common reason for a low appraisal is that the appraiser didn’t consider all your home improvements. If you’ve made significant renovations or additions to your home, the appraiser needs to factor that into the equation.

For example, let’s say you added a new bedroom and bathroom to your home. If the appraiser didn’t consider that, they may use comparable sales of homes without those features, which would lead to a lower appraisal.

The appraiser Is inexperienced or Biased

Unfortunately, not all appraisers are created equal. Some appraisers may be inexperienced and make mistakes that lead to a low appraisal. Others may have a personal bias against your home or property type, leading them to underestimate your home’s value. If you suspect that the appraiser may be inexperienced or biased, you can request a different appraiser.

What You Can Do If You Get a Low Appraisal

If you get a low appraisal, don’t despair! You can take steps to challenge the appraisal and get a more accurate valuation for your home. Here’s what you can do:

Get a Copy of the Appraisal and Look for Mistakes

The first step you should take when challenging a low appraisal is to get a copy of the report from the appraiser. Once you have the report, carefully review it for any mistakes. Common mistakes on appraisals include incorrect square footage, the wrong number of bedrooms and bathrooms, and errors in the comparables used. If you notice any mistakes, be sure to point them out to the appraiser and ask for a revision.

Provide Additional Information to the Appraiser

If you have information about your home that you think the appraiser may not be aware of, you can provide that to them. For example, if you’ve made major renovations or improvements to your home, ensure the appraiser is aware of that. You can also provide comparable sales that you think are more accurate than the ones the appraiser used.

Get a Second Appraisal

After taking the steps above, you can always get a second opinion if you’re still unhappy with the appraisal. You can either ask the lender to provide you with a list of other appraisers you can choose from or hire your own.

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