When issues arise with your real estate appraisal, an inaccurate valuation of the property can significantly impact your finances. Property owners have recourse when they believe that their real estate has been incorrectly appraised.
Take action when you receive an unexpectedly low property valuation from a professional appraiser.
Gather evidence
Real estate appraisers look at the sale prices of comparable properties to help them determine property value. If you can gather data on similar homes in your neighborhood that sold for higher than your appraisal value, you have grounds to challenge the appraisal and can request an adjustment based on this information.
You should also provide the lender managing the appraisal process with details about your home. For example, list the improvements made since you purchased the property and the date of these upgrades. Indicate the square footage of the home, the number of bedrooms and bathrooms, and other details that reflect upon its market value.
Check for errors
In addition, make sure that the appraiser is not comparing your home to properties that are smaller, have fewer features or are not in your direct neighborhood. Even a few streets can make a big difference in real estate prices.
Request a new appraiser
When a bank assigns an appraiser for a real estate transaction, he or she may not necessarily have knowledge of your specific area that will influence the value of your home. If you have noted errors in the appraisal report, request a new appraiser and ask that he or she actually visit your home and make note of improvements that impact the potential sale price.
If your property value still comes in unexpectedly low and you feel that the appraiser has not captured the true value of the home, you may be eligible for a legal claim. For example, the lender may be responsible for financial damages that result from the loss of a sales contract because of an erroneous appraisal.