What do we do about a low-ball appraisal?

Question :

Back in June, we tried to refinance. Had an appraisal done - house came in at 457k. Husband lost job. It was right before the bank checked his employment history, and so we couldn't qualify for the mortgage.

Fast forward to November. Husband has job, everything is in place to refinance. We're just waiting for the new appraisal. When the appraisal came back, it came in at 415k. A huge difference from 5 months ago. The comps that were used were for un-remodeled houses similar to ours. (We just came out of a major remodel - total gut down to studs, new heating, electrical, plumbing, walls, ceilings, marble & granite baths and high-end kitchen. The new appraisal did use one of the comps that were on the first appraisal, but, he gave our house a much lower value vs this comp than the previous appraisal. There were also inaccuracies on the report on things, like the siding material, floor materials, he didn't mention hardwood floors.

The broker has filed a rebuttal/dispute with the appraisal company to have them look over the appraisal for errors.

Is there anything else that can be done while we're waiting for the appraisal company to get back to us? The mortgage broker said, he doesn't think they are going to change the appraisal. It seems so unfair, they can state their opinion, and then, it becomes law with no recourse for the person who actually paid for this thing!!

Answer :

I would like to point out that, the appraiser's valuation is not something that can be "low-balled". The appraiser is a trained professional with education, licensing, and Errors & Omissions Insurance requirements. It is their job to as accurately as possible value the property. They put their license and career on the line with their appraisals.

Each lender has a process to go through to counter/dispute a low value; however, in the crazy market we're now, it's really difficult for us to comment, when there is a possibility the comps used 6 months ago have now expired and nearly perfect new ones are available.

It is great, your broker asked someone else to see if there is a problem with the accuracy or the appraisal however, a well trained loan originator should be able to identify problems with an appraisal and not hope someone else will catch them.

Date: : November 28