About Us · Advertising · Disclaimer ·
How To Protest Against A Low Home Appraisal?
May 19th, 2010
An undesirable, low home appraisal
can prevent a home from being sold and destroy the home sale transaction. It is
considered one of the most popular reasons why most transactions fail.
When an appraisal is evaluated
to be lower than expected in a normal market condition, it will be up to the
buyer and seller to tango or try to make it work. This will either require the
buyer to fork out more money or the seller lowering the price thus making a
sale.
According to Tara-Nicholle Nelson, an educator for Trulia.com, in today’s
housing market, many sellers are offering to sell at
prices close to what they owe their bank. Often, the price is much higher than
the actual market value. This notion often prevents any room for negotiations
and is often the deal killer.
Leslie Sellers, president of
the Appraisal Institute stated that current market conditions make the role of an
appraiser’s job more challenging. For example, fewer home sales make it more
challenging to assess the current value of a home within the area. In addition,
short-sales are normally much lower than a traditional sale as the seller is
selling the home for less than its market price whereby permitted by the lender.
According to Eric Fox, vice
president of statistical and economic modeling for Veros,
appraisers have to be careful in their estimates and know the local markets
well. In some regions, home prices have bottomed out or risen while other
regions are still in trouble.
Mr. Fox claims that the
current market is tricky which makes the jobs of appraisers difficult. It is
easy for appraisers to make errors in valuating your home accurately given the
complicating current market condition. When they have made an error, sellers
have the right to request for an appeal.
Verify Errors
Whether you are selling,
buying a home or refinancing your mortgage loan, don’t rush in examining the
appraisal report. Ensure that the appraiser made no errors in valuating your
property resulting in a lower valuation.
Griff Straw, president of Solidify, an appraisal management
company says that your lender should be able to guide you through the process
in understanding the appraisal report. He advised not to hesitate asking any
questions. Bear in mind that the report basically consists of an appraiser’s
collection of information and interpretation of data.
Ensure that the basic
information match, such as the number of bedrooms and bathrooms. Be attentive
to certain omissions such as a recent upgrade or significant home improvement
that should have resulted in an increased in the value of the property.
Finally, ensure that the
comparable sales data they utilized were fair and accurate. Mr. Sellers
mentioned that if the appraiser had included comparable sales data of the house
next door in which you had full knowledge that it was an unusual short-sale,
then it is important for you to inform your appraiser. Not doing so may result
in your home being appraised for much less.
Difficulties of Appraisals
If errors are discovered, the
lender may challenge the appraisal firm’s report through a formal process.
William Fall, chief executive
of William Fall Group, a national appraisal company said that they are not
afraid to make corrections to any errors. He said that corrections to
appraisals are not common but they do occur.
Tara-Nicholle
Nelson mentioned that within the past month, she has knowledge of 3 to 4 cases
where individuals had protested successfully against appraisals with results in
their favor.
Protesting Or Challenging An
Appraisal Report
In order to protest or
challenge against an appraisal report, there are 2 factors that will justify your appeal. According to Fall, the following below will justify an appeal.
- The appraiser failed to account recently identical
sold properties in the estimate.
- The appraiser made an error in reporting the
characteristics of the property that could resulted in the value estimate.
Keep in mind that in your
efforts to justify that a home improvement should be accounted in the
appraisal, it has to be reflected as a major capital improvement such as a new
kitchen. It is advised to store receipts of the upgrade illustrating this new
improvement as evidence.
There is a clear difference
between regular maintenance and home improvement. Upgrading the kitchen with
new granite countertops, new cabinetry, outfitting the bathroom with new
fixtures, tiling and vanity are very different from simply painting the walls.
Being Proactive
Often being proactive rather
than being reactive helps as you can take measures by providing your appraiser
with helpful information before he or she concludes
the appraisal process.
Leslie Sellers from the
Appraisal Institute says that if you have knowledge of a foreclosure in your
neighborhood which resembles the physical characteristics of your home or a
property that is devastated by a divorce forcing a low price, you should be
proactive by informing your appraiser.
Mr. Sellers also proposes to request your
lender to use an experienced, certified residential appraiser from the area or
region where your property is located. Keep in mind that your lender is not
obligated to honor your request but it is worth a try.
Comments
News Archive
More Borrowers Falling Out Of Govt Modification Program - May 17th 2010
Right-To-Rent Act Provides Relief For Foreclosed Borrowers - May 3rd 2010
Foreclosure, Short-Sale, Deed In Lieu Will Hit Your Credit Score, But How Much? - April 22nd 2010
Pick Up The Phone, You May Have Won A Modification - April 6th 2010
New Rescue Plan To Embrace Loan Principal Reduction - March 26th 2010
Bank of America Reduces Mortgage Principal By Up To 30 Percent, Starting May 2010 - March 24th 2010
Foreclosure Rescue Firms Banned From Operating - March 22nd 2010
Private Loan Mods Performing Far Better Than Government Loan Mods - March 17th 2010
New Government Short-Sale Program, HAFA To Launch April 5th - February 24th 2010
1 In 4 U.S. Mortgages Are Underwater - February 24th 2010
Citi Allowing Struggling Homeowners To Remain In Homes For Additional 6 Months - February 11th 2010
How To Avoid A Deficiency Judgment After A Short-Sale? - February 3rd 2010
State Officials Demanding Banks To Reduce Loan Principle - January 20th 2010
Short-Sale Fraud Or Not? - January 15th 2010
Permanent Modifications Are Higher But Still Not Enough - January 15th 2010
Mark Zandi's Forecast of Housing Prices In 2010 - December 9th 2009
Stay Or Walk Away From Your Home? - November 24th 2009
Fannie Mae Launches New Program Converting Delinquent Homeowners Into Renters - November 11th 2009
Homeowner Gets To Keep Home After Lender Failed To Prove Ownership - October 27th 2009
Implications Of A Loan Modification - October 15th 2009
41 Suspects Arrested For Mortgage Fraud - October 15th 2009
Bridge Loans Coming Soon For Unemployed Homeowners - October 14th 2009
Government Modification Program Inadequate And Calls For An Upgrade - October 9th 2009
Freddie Mac Offers Door To Door Help On Your Modification - September 29th 2009
Federal Housing Administration (FHA) Running Out Of Money - September 18th 2009
Good Time To Refinance With Government Program - September 15th 2009
Selling Your Home And Tips For The First Time Homebuyer - September 14th 2009
How To Keep Your Home If You Lose Your Job - August 28th 2009
Citigroup Performing Well In Foreclosure Prevention - August 25th 2009
Foreclosure Rescue Scams Preying On Homeowners - August 17th 2009
Deutsche Bank Estimates 48% of U.S Homeowners Underwater By 2011 - August 11th 2009
Loan Modification Progress Report Card - August 5th 2009
How Bad Are Foreclosures In Your City? - July 30th 2009
Rep. Barney Frank Threatens Banks To Stop Foreclosure Or Else? - July 28th 2009
U.S Government Wants 500,000 Trial Modifications By Nov 1st - July 28th 2009
Subprime Brokers Involved In Loan Modification Scam - July 21st 2009
'Walk-Away' Survey Shows 26% of Defaults Are Intentional - July 21st 2009
'Own-To-Rent' The New Emerging Mortgage Plan - July 17th 2009
Tools To Help Homeowners Save Big In Property Taxes - July 16th 2009
Lawmakers Dissapointed With Foreclosure Help Programs - July 16th 2009
New Jersey Attorney General Goes After Mortgage Scams - July 15th 2009
Watch Out For Some Misleading Reverse Mortgage Advertisements - July 6th 2009
Chase And Bank of America To Experience 2nd Wave of Foreclosures - July 6th 2009
Obama Extends Mortgage Refinancing Program, Raising New Limit To 125% - July 1st 2009
Paper Avalanche, Lack of Trained Staff Add Obstacles To Loan Modification Program - June 29th 2009
Government Loan Modification And Refinance Program Shows Substantial Progress - June 18th 2009
Luring First Time Homebuyers, Tips To Beat The Competition And Sell Your Home - June 15th 2009
Bank Of America has modified 50,000 loans in Countrywide settlement - May 26th 2009
If you find the information on our site useful, bookmark us for future updates.
'Right-To-Rent Act' Provides Relief For Foreclosed Borrowers
There is a new law on its way to the House of Representatives intended in providing post relief for homeowners who lose their homes to foreclosure. The Right-To-Rent Act 2010 is intended to allow ex-homeowners with foreclosed homes to remain in the property by paying fair market rent for up to 5 years. - READ MORE & PODCAST
Short-Sale, Deed In Lieu Or Foreclosure Will Hit Your Credit Score. But By How Much?
Credit Bureaus were previously uncooperative in revealing the fine details in reference to point losses on credit scores impacted by the various forms of mortgage delinquencies. We’re in better luck today as Fair Isaac Corporation, the inventor of the FICO score, shared some interesting and important facts. - READ MORE & PODCAST
Pick Up The Phone, You May Have Won A Modification
Just recently, major banks and servicers, such as Bank of America have only started providing principal reductions to a tiny fraction of borrowers as a last resort. A new sort of mortgage servicer called ‘speciality servicers' are experiencing success in averting more foreclosures. - READ MORE & PODCAST
New Rescue Plan To Embrace Loan Principal Reduction
The public outcry of government bail-outs of banks and the poor success of the loan modification program have urged the U.S. government to unveil yet another new plan to curb the foreclosure crisis. The new plan is designed to aid 2 groups of borrowers. - READ MORE & PODCAST
Bank of America Reduces Mortgage Principal By Up To 30%
Bank of America announced that it will reduce some borrowers' loan principal by up to 30% beginning May of 2010. To qualify, the homeowner must have missed at least 2 months of mortgage payments and owe at least 20% more than their home is currently worth. - PROGRAM DETAILS & PODCAST
Foreclosure Rescue Firms Banned From Operating
The FTC (Federal Trade Commission) together with the states of California and Missouri, banned the owners of U.S. Foreclosure Relief Corp. from offering relief services under a settlement complaint that was initiated in 2009. - FULL STORY & PODCAST
Private Loan Mods Performing Far Better Than Government Loan Mods
HOPE NOW, a private sector coalition of mortgage servicers, investors, insurers and nonprofit counselors wrapped up 99,499 proprietary loan modifications in January, twice the amount of 50,364 permanent modifications completed under the Home Affordable Modification Program (HAMP). - FULL STORY & PODCAST