What can you do when an appraisal comes in low?
When we have a rapidly appreciating housing market like we do now, low appraisals are always a concern. So when your buyer gets one and the appraiser didn’t use that comparable you thought was perfect, what do you do?
Here is a checklist that provides insight into what appraisers consider and don’t consider when revisiting the derived value. I hope this helps you understand when requesting a reconsideration of value may have merit and when the value is probably just not there. Don't make this mistake when asking for an appraisal reconsideration.
I've discussed some of the things appraisers will and won’t consider when you’re trying to get an appraised value changed. That list did not include pending sales…can those be used to help increase the appraised value?
The short answer is no. So then why do you sometime see pending sales in appraisal reports? Here’s some background and an explanation directly from our appraisal management company…
While appraisers do include active and pending sales in the appraisal reports, they are not weighted in the value opinion. The inclusion of active/pending sales stems back dozens of years when there were lender requirements to have them in reports. Many appraisers have simply made it practice to include them so they do not have to go back and add after the fact, but that is really the only reason, it is not for support of their value opinion.
The reason the appraisers include them is to demonstrate market activity, support DOM conclusions, supply and demand trends, etc. The value opinion is supported by the adjusted sales prices of the closed sales which is why we ask that the properties included for consideration are settled sales that occurred on or before the effective date of the appraisal report.