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Common Issues With Home Appraisals

July 2, 2021

Common Issues With Home Appraisals

During this time in our economy, one of the most difficult issues facing home sellers is getting through an appraisal on your home.

All lenders require a home appraisal, which is the report lenders rely on as the collateral for the mortgage, for borrowers purchasing or refinancing a home. An appraisal determines the value of must the lender requires one so they know how much the asset for which they are lending is worth. 

How Does the Appraisal Process Work?

In recent years there have been new appraisal laws passed, including that an appraisal must be ordered by a third-party vendor. This is why appraisals are now ordered through an AMC or appraisal management company. Once the AMC receives an appraisal order, all licensed appraisers who are signed up with that AMC have an equal opportunity to accept the appraisal order, on a first-come-first-serve basis. 

Once an appraiser accepts the bid, they will schedule an inspection time with the homeowner or listing agent. On average, an appraisal takes 7 days from the date ordered to receive the actual report. Once the report is received, an underwriter will go through it with a fine-tooth comb to make sure they agree with the appraiser’s remarks. However, sometimes revisions are needed.

 Common Issues With Home Appraisal

The appraised value is the most common issue with appraisals. When the appraised value is lower than the purchase price or amount needed to complete a refinance, borrowers are upset. As stated above, the third-party unbiased appraisal protects both the lender and the borrower. The borrower may find this frustrating and admittedly it does cost them some money, but it also protects them from buying an overvalued asset.

Condition Of Property and How It Causes Appraisal Issues

An appraised value will either come back “as is” or “subject to” repairs. An appraisal is different than a home inspection, but an appraiser will still notice major deficiencies. Any damage from a leaky roof or missing drywall will need to be addressed prior to closing on the mortgage. Photos will be taken of damaged areas and those items will need to be fixed. Once the seller completes the repairs, the appraiser will go back to the home and confirm the repairs are completed.

Can I Ask for a New Appraisal?

In most cases, contesting the appraisal or asking for a new appraisal to be completed is unsuccessful. When you contest an appraisal or ask for a new appraisal to be completed, you’re theoretically saying that the appraiser was wrong with his report.  Successfully getting the appraiser to change his value or the lender allowing for a new appraisal to be completed will depend on the lender as well as the appraiser.

 Let The Mortgage Firm Help You With Your Appraisals

As the majority of home buyers will need a mortgage to purchase a home, the appraisal process is a piece of the home selling puzzle that cannot be avoided.  Fortunately, these common issues with an appraisal process can be avoided if the proper steps are taken. At The Mortgage Firm North Central Florida, we are here to help you with every step of the home buying process including the appraisal process. Contact one of our knowledgeable loan officers today.