A home appraisal plays a crucial role in real estate transactions, refinancing, estate settlements, and legal matters. But what happens when the appraised value doesn’t align with expectations? Whether you're a homeowner, buyer, seller, or real estate professional, a lower-than-expected appraisal can be frustrating and create challenges in moving forward.
If you find yourself in this situation, there are ways to address an appraisal dispute and, when necessary, seek a second opinion to ensure a fair and accurate valuation.
Why Do Appraisal Disputes Happen?
Several factors can contribute to an appraisal value that seems off. One common issue is market timing—if comparable sales used in the report are outdated, they may not reflect current conditions. In some cases, inaccurate data in the report, such as miscalculated square footage or missing property upgrades, can skew the results. The selection of comparable sales also plays a role. If better sales were available but not used, the valuation may not accurately represent the home’s worth.
Properties with unique features can sometimes pose a challenge as well. Homes with extensive renovations, custom designs, or premium lot placements require a more nuanced valuation. If these elements aren’t properly accounted for, the final number might not reflect the home’s true value. Additionally, an appraiser who is less familiar with the neighborhood may not fully recognize certain local factors that influence pricing.
Before jumping to conclusions, reviewing the appraisal report carefully can help pinpoint the cause of the discrepancy and determine the best approach to resolving it.
Steps to Challenge an Appraisal
The first step in disputing an appraisal is a thorough review of the report. Pay close attention to property details such as the number of bedrooms and bathrooms, square footage, lot size, and any listed upgrades. Even small errors in these areas can impact the valuation. If something appears incorrect or missing, gathering evidence to support a correction is essential.
A strong case for reconsideration includes recent comparable sales that better reflect the property’s value, a list of significant home improvements, and any previous appraisals that support a higher number. Once all relevant data is gathered, a formal Reconsideration of Value (ROV) request can be submitted through the lender. This process allows homeowners, buyers, or agents to provide additional information for the appraiser to review. The request should be concise, professional, and focused on factual data rather than personal opinions.
Though not every dispute results in a change, appraisers may revise a report if clear errors or overlooked factors are identified. If the dispute process does not yield a satisfactory outcome, the next step may be to seek a second appraisal.
When Does a Second Opinion Make Sense?
A second appraisal may be necessary in cases where a significant error in the original report has impacted the valuation. If key property details were misrepresented, such as an incorrect square footage calculation or missing structures, a new appraisal can provide a fresh and accurate assessment.
Discrepancies in the comparable sales used may also justify a second opinion. If the original appraisal relied on sales that do not accurately reflect the home’s condition, location, or upgrades, a new evaluation can help establish a fair market value. Lenders sometimes require a second appraisal when inconsistencies arise, particularly in high-value transactions or unique properties.
Beyond real estate transactions, second opinions are also valuable in legal matters such as estate settlements, divorce proceedings, or tax assessments. In these cases, an independent appraisal ensures an accurate valuation for financial or legal purposes.
Choosing an experienced appraiser with local market expertise is crucial for obtaining a reliable second opinion. Working with a certified professional who understands the nuances of the area can help provide a more precise and well-supported valuation.
Moving Forward with Confidence
A disputed appraisal doesn’t have to derail your transaction or financial plans. By carefully reviewing the report, gathering supporting evidence, and requesting a reconsideration when warranted, inaccuracies can often be corrected. When a second opinion is necessary, working with an experienced and impartial appraiser provides clarity and confidence in your property’s value.
At Irvine Appraising Company, we specialize in objective, professional appraisals throughout Salt Lake City and the surrounding areas. Whether you’re disputing an appraisal, need a second opinion, or require an independent valuation for legal or financial purposes, our team is here to help.
📞 Contact us today to discuss your appraisal needs.
