Did Your Appraisal Come In Below Sale Price?

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There are few things that feel as much like a gut-punch than getting a lower appraisal than you expected. You’ve brought in a fair offer for your home and then, out of the blue, an appraiser seems to think that your house is worth less than what was offered. Most people assume that this is a death knell for a sale—after all, why would the buyer maintain their offer when a trained professional has deemed the home to be worth less than they offer?

If you’ve received an appraisal that you believe undercuts the true value of your home, don’t panic. There are a number of ways that you can dispute the valuation of the appraiser, and even get that value restored to your official appraisal.

A poor appraisal doesn’t mean that your sale is doomed. It simply means that you’ve got to get to work and defend your home’s honor. Here are three common ways where you can find logical flaws in the appraisal process and increase valuation in the process.

01) Comparables

One of the major factors that an appraiser takes into consideration when making their appraisal is comparable sales. This means they look at homes similar to yours and create their valuation accordingly.

As you can imagine, this leads to a lot of mistaken assumptions. Here are a number of common comparables that are mistakenly applied:

Are they within a one-mile radius? It’s one thing to value a home based on size alone…but everyone knows that it’s all about location, location, location. If your home is in a better neighborhood, make sure you’re getting the benefit!

Were they sold within the last six months? The value of a home is almost constantly on the way up. That means a home sold during 2016 should get a higher valuation than one sold in 2011.

Do they have the same bedroom and bathroom count? Well, do they? Bathrooms are especially telling, considering the amount of expensive plumbing they require. If your home has more bathrooms than a similarly-sized property, make sure that it’s recognized!

If you think you’re being shortchanged for a facet of your home with intrinsic value, make sure you bring it up with the appraiser!

02) Line Adjustments

Line adjustments is the phrase used to describe things like the aforementioned location, if there’s been work done, or if there’s a pool. Basically, anything that doesn’t have a firm dollar amount.

Translation: It’s up to the appraiser to make a call on its value, and that makes the appraiser’s valuation an opinion. It’s easy to argue against opinions. Find out why your pool or location isn’t getting the same love as the home down the street that was sold recently.

03) Type Of Buyer

Believe it or not, the appraisal of your home often varies depending on how the buyer plans to pay for your property. Are they using cash or will they be getting financing? Are they a V.A. buyer? These and other factors occasionally have an odd way of altering the final appraisal.

Make sure you find comparable homes and check what their valuation was, based on how the buyer paid. Did the value rise if the buyer was using financing, while your buyer is using cash? Make sure to point these negative trends out to the appraiser.

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