Common Errors To Look For In Your Property Appraisal

Did your property appraisal come in low? An appraiser's job is to be impartial on the value of your home. But what if you believe your home is worth more than it was appraised for? If your home receives a low appraisal, here are tips to navigate the situation.

 

What Is A Low Appraisal?

When the home appraisal comes in below the contract price, it limits the amount a lender will finance because they base the loan on the home value as shown in the appraisal. While this might feel frustrating, your real estate agent can help guide you through the next steps.

First, is it important to consider if your opinion of value is unbiased? Is it what you WANT for the house, or what you KNOW it's worth?

If you still believe your home is worth more than it was appraised for, you can challenge the appraisal. But - you must be prepared to point out mistakes the appraiser made in comparing other properties, by missing new or upgraded features in your home or comparables not used in the appraisal that are valid indicators of value.

 

Common Errors To Look For

1. Gross Living Area

While you might not know the gross living area of your home, you can check against county records, or even look at past appraisals. While the numbers might not match perfectly, they should be close. If you see a large difference in the gross living area, you can ask the lender to have the appraiser double check the measurements.

2. Adjustments

An appraisal adjustment is usually a small addition or subtraction from the value of a comparable property. Do you see adjustments on the appraisal? For example, if your home has a pool, and other comparable homes used in the appraisal do not, do you see an adjustment for the additional value?

3. Recent Updates / Improvements

Did you tell the appraiser about recent updates or improvements made to the home? If you forgot, take a look and see if adjustments were made to reflect the recent changes. If not, you can get in touch with the lender and let them know about the improvements.

4. Comparables

How close in similarity were the comparable homes? Typically, comparables are homes that have sold within the last 90 days - the more recent the better. Appraisers pick at least three closed sales as comparables. They can also list a few active or pending listings to illustrate current market behavior, which can have a big effect on a home’s value. Keep in mind the best comparables are similar in size, not to distant from your location, in the same town/city, have closed within the last 90 days, have a similar lot size, and have similar location influences (like a view, on a busy street, abuts to a school or cemetery, etc.)

5. Number of Bedrooms & Bathrooms

Did the appraiser count the right number of bedrooms and bathrooms? This is usually easy information to spot, but when it comes to bedrooms a room with a bed doesn’t make a bedroom - it must have two means of exit, like a window and a door that can be closed.

If you have good reason to believe the appraisal was too low, you can challenge the appraisal or get a second opinion on your home appraisal.

 

Need A Second Opinion Home Appraisal In Phoenix, AZ?

We do home appraisals in the Phoenix area including Scottsdale, Chandler, Gilbert, Mesa, San Tan Valley and surrounding areas. We welcome you to look through our website, review appraisal services, join our Facebook community, and learn more about our expert appraisers.

Give us a call to schedule your appraisal.