San Diego Appraisal Rebuttals
When buying a home, most people borrow money from a bank or lender because they do not have enough cash to buy the house outright. When applying for loan, the lender will have the property appraised by a professional. If the appraisal comes back lower than the price of the house, the lender will refuse your loan application: they are not lending you money because the asking-price of the house is higher than what it is really worth. This is a problem you want to avoid because it usually results in a failed transaction.
What to do if you have a Low Appraisal
What can you do if the home appraisal is lower than the asking price of the home? There are a few ways to move forward:
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- Seller agrees to lower the ask-price of the house. Most home owners do not like this option because they will receive less money than what they had hoped for.
- Buyer finds money from another source. Most Buyers don’t like this option because they will owe money to two places instead of one. In addition, they don’t want to overpay for a house.
- Get a second opinion. It is possible that the appraiser overlooked something important or he may have made an honest mistake. Get a second opnion and if the first appraisal is clearly wrong, send a letter to the lender pointing out the differences and ask for a revision. However, getting a second appraisal does not guarantee a higher valuation.
- Buyer or Seller can send the lender a Rebuttal.
San Diego Appraisal Rebuttals
An appraisal rebuttal is when you write a letter to challenge or dispute the low appraised value of a property. This process is only worthwhile if there has been a mistake in the valuation. If the house is physically not worth the asking price, then no cajoling will change the appraiser’s mind. However, if there was a real reason why the appraised value was too low, then there may be an avenue to move forward. Examples of this may be:
- Clerical Errors: If the house is a three bedroom but the appraiser mistakenly marked it as a two bedroom home then this will cause an incorrect appraisal.
- Artificial Low Comps: The appraiser will determine the value of your house based on the price of nearby homes of the same size/location. It may be that a nearby home was sold cheaply because it was sold from a parent to their grown children. If this is the case then it will artificially drive down the value of your property.
- Very Recent Home Sales: Find comparable homes of the same size and within the same location that have been sold very recently. The sale price of these homes will influence the value of your property. Most appraisers know how to find this data but there may have been new home sales that the appraiser was not aware of at the time of the appraisal. You will need 3 or 4 of these new sales to sway an appraiser.
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- In short, San Diego appraisal rebuttals are an uphill battle and should be avoided if possible. Appraisers are calculated individuals who can measure the value a house based on concrete details such as the quality of the roof & construction, the number of rooms & size of the property, the integrity of the electrical & plumbing systems, and the presence of upgrades & additions. These chracteristics don’t often change much unless there was a clerical error.
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