Challenging Errors on Your Home Appraisal: A Guide for Hardworking Americans
A home appraisal is an integral part of buying or selling a home, refinancing a mortgage, or appealing property taxes. However, the appraisal process is not foolproof; mistakes do occur. Fortunately, if you believe there's an error in your home appraisal, you can dispute it. This guide will break down the steps you need to take to challenge incorrect data, inappropriate comparisons, or a mistaken valuation.
Understanding Home Appraisals
A home appraisal is an unbiased estimate of the value of a home. A licensed or certified professional performs it, using objective measures such as the home's physical characteristics, location, and how well it compares to recent sales of similar homes. Even with such objective measures, inaccuracies can transpire. Recognizing these inaccuracies is your first step towards a fair appraisal.
Identify Any Errors
Carefully review your home appraisal report for any potential errors. These may be simple, factual mistakes, like the wrong number of bedrooms or bathrooms, or incorrect square footage. They could also be errors in the use or interpretation of data, such as using inappropriate comparables. Document each error thoroughly for future reference.
Research Home Values in Your Area
Perform your own research on similar home sales in your area to verify the comparable sales the appraiser used. These "comparables" are similar homes in your area that have recently been sold. If the appraiser selected comparables that aren't actually like your home, it could change the value of your appraisal significantly.
Gather Your Evidence
If you suspect an error, compile supporting documents. These can include blueprints or contractor statements for the correct square footage, proof of recent home improvements, or evidence of higher sale prices for comparable homes in your area. The more objective proof you can provide, the stronger your dispute will be.
Draft a Dispute Letter
The next step is to write a formal letter disputing the appraisal. Address it to the lender, who ordered the appraisal, not the appraiser themselves. Include a detailed explanation of each error you believe you've found and reference the supporting evidence you collected.
Submitting Your Dispute
Submit your letter and accompanying documentation to your lender. When your lender receives your dispute, they usually submit your claim and the evidence to the original appraiser, who then reviews your claim and makes a decision. This can take up to several weeks.
Alternative Routes
Alternatively, you can request a second appraisal. This might cost you extra but can be justified if you believe there are significant errors in the first appraisal. You can also submit a complaint about the appraisal to your state's licensing board, or even bring the issue up to the Consumer Financial Protection Bureau.
Persistence Can Pay
Disputing a home appraisal can take time and effort, but when substantial equity, a favorable loan, or lower property taxes are at stake, it can be worth the strain.
Conclusion
Home appraisals can be a stepping stone or stumbling block in your real estate journey, depending on their accuracy. Understanding what appraisals involve, being able to identify possible errors and knowing the routes to dispute them are crucial skill sets for every homeowner. Don't be discouraged if the process seems daunting; persistence usually pays off, and you'll be safeguarding your most valuable financial asset.
Knowing your rights can open opportunities and save you money in the long run. Remember, a wrong home appraisal doesn't have to be the end of the road; it's a hurdle you are fully equipped to overcome.
