Therefore, management and appraisal must take care of these challenges as follows: Challenges of performance appraisal Create a culture of excellence that inspires every employee to improve and lend himself or herself to be assessed Align organizational objectives with individual aspirations Don’t rely just on the bank’s word that the appraisal came back under contract price. And be nice. Thankfully after the initial challenge he amended the rent rolls from $3100/mo to $3300/mo and he's been very communicative so far which has been good. PS Listened to Bigger Pockets Podcast #314 with Andresa Guidelli and tried using some of her tips regarding challenging appraisals, this is my first time buying/challenging an appraisal so could use any advice to aid in this process :). This keeps everything on the up & up and no one can be seen as influencing or being influenced. 1. They had spoken to a real estate agent about selling, but never signed an agreement. If done right. Your appraiser should have used comps for properties sold in the past 90 days. We call this a. As we’ve mentioned before, an appraiser cannot be pressured to hit value. How to challenge a low appraisal. Most appraisal challenges will only be seriously considered if there are factual (not subjective) errors in the appraiser and the appraiser has omitted glaringly obvious comparable transactions from his or her original report. Literally. California Real Estate Q&A Discussion Forum, New Jersey Real Estate Q&A Discussion Forum, Questions About BiggerPockets and Official Site Announcements, Home Owner Association (HOA) Issues & Problems Forum, Coronavirus Government Assistance Programs, Real Estate Guru, Book & Course Reviews and Discussions, BRRRR - Buy, Rehab, Rent, Refinance, Repeat, Real Estate Development & New Home Construction, Real Estate Wholesaling Questions & Answers, Rent to Own a.k.a. However, they might have overlooked properties, such as a home in your neighborhood that sold shortly after the appraisal was completed. If you feel you received a low appraisal and want to challenge the conclusions in the report, you can contact the lender. Helping homeowners navigate the appraisal process, When the Uniform Standards of Professional Appraisal Practice (USPAP) first, We have an exciting announcement! By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions. Aaron, thanks for responding! Get a Copy. Find local real estate meetups and events in your area. Approach the topic carefully, respectfully, and humbly. Also, if the sales the appraiser used all sold in the last three months, and you provide a 14-month old sale, then the appraiser will probably not use that sale. If you have better comps, that is closer proximity, more recent sale date or lease info dates, and more similar in location, physical characteristics etc, that is what you need to challenge the appraisal. When you provide alternate sales, make sure & include commentary that explains why your sales are more comparable to the subject property than the sales used by the appraiser. Is the square footage what you thought it should be? Stick with the facts. Yay! They should all be located in or near your neighborhood, so you might have some insight into these homes that the appraiser didn’t have. Challenge the appraisal in a respectful manner, always keeping conversations business-like and emotionless. Help! There are numerous mistakes an appraiser could have made, most of which are honest mistakes. George if that triplex cash flows at 3.5% down its one in a million. He stated that since none of the 13 Comp properties had rent rolls over $3,100 that was the highest he could go, again none of the comps he used are 7-Total Bedroom Triplexes. If you’re the purchaser, that won’t be too hard; however, if you’re the seller, you’ll need to get a copy from the buyer. How to Challenge an Appraisal. But wait. Sometimes, an appraiser might make an easy mistake, such as saying your home had two bedrooms when it really has three. Have you looked at what a 3 bedroom unit in a duplex or triplex looks like for rent? Confusing. Subscribe today and get the Oct/Nov issue delivered to your door! You’re not asking the appraiser to change the report, but to reconsider the value. Appraisals are conducted by humans and humans make mistakes. Don’t go out and just find the highest priced sale you could find. Getting a real estate appraisal increased is not easy to do. Are the bedrooms & bathrooms accurate? 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