First of all know that an appraiser is often time shielded from having direct conversation with the loan officer, agents, buyers and sellers. This wall of division from the appraiser was implemented to protect them from being unduly persuaded to meet a price goal. No undo influence. The path for communication may be filtered through the underwriter who can review information prior to submitting to the appraiser.
A reconsideration of value can be sought. Things to be aware and incorporate in this reconsideration are:
• Request from the lender a list of the comparable sales the appraiser utilized. If you can get a copy of the appraisal, go for it. Also if they will release this information - what adjustments were made on the report? How did they value certain improvements of the home being appraised? Get into as much knowledge on the front end as possible.
• Be thoughtful in the choice of comparable sales that you submit to elevate the price. Appraisers try to use homes that are within 6 months in time frame of sold date, same neighborhood, similar square footage, similar age (don't throw in a new home if your home is preowned and there are several sales that sold as preown). Eliminate sales that have amenities that are far superior like pools, views, condition where you property is not as appointed. In other words select homes that are most like your property and would require little to no adjustments.
• Be aware of homes that may have had seller contribution to buyer costs. The appraiser probably deducted that out as an adjustment so that would lower the value of the comparable sale.
• Find out what the square footage adjustment utilized on the report. It is not the price per foot but a lesser amount that just reflects the living area.
• Trouble shoots information. If sales utilized on the appraisal has problems like odor, finish quality understated, condition, traffic or negative influence be aware and see if the appraiser made appropriate adjustments to reflect these differences. If not, provide verifiable information to the appraiser regarding the problem and that it should be reconsidered higher because of the negative for this issue.
• Quality of the home. Sometimes an appraiser is unfamiliar with an area and uses comparable sales that were from an inferior builder in the area. Point this out and why your home has more quality - points of difference.
• If your sales price exceeds the list price then there may be a problem. If the home has been listed for an extended time at the list price then it probably will not value over that unless there have been some verifiable condition changes on the home.
Remain professional; never lose your edge of a business productive conversation. Stay away from any comments that would be condescending. Remember the honey rule ... no time to dish out the vinegar. You have a goal and that is to get the value elevated.
Huge Tip - NEVER, NEVER start a conversation with an appraiser or underwriter with "well the price per foot in the neighborhood/area is ...". That is the quickest way to shut the appraiser down in conversation and stop listening to your input. Appraisers do not, again I repeat, do not value with a price per foot.
The best proactive tip is to submit to the appraiser upfront good information about a property so that there will be less likely problem of the value being cut. But those tips will be in my next blog.