When you're selling your home and get your appraisal, it's not uncommon to experience sticker shock — not because your home is valued higher than you thought, but because it doesn't even come close to your expectations.
Your first inclination is that something must be wrong, and truth be told, you might be right.
If you think your home appraisal is too low, you don't have to accept it as fact. Here's what you can do to fight back — and win:
Why Challenge an Appraisal?
Before we get into the specifics, it's important to understand why a low appraisal isn't a good thing. For starters, it can make it difficult to refinance your home should you decide to keep it.
Also, you want the appraisal to be higher than what you have it listed for, as this will signal to buyers they're getting a great deal on a home versus overpaying for it. Buyers may be hesitant to buy a home that isn't worth its alleged value, which could force you to accept a much lower offer.
If you're not happy with your appraisal, use these five tips to get a more favorable outcome:
1. Look for Mistakes in the Appraisal
Get a copy of the appraisal and start combing it for mistakes. There's a strong chance the appraiser may have overlooked something, wrote down the wrong number of bedrooms or bathrooms, or miscalculated your square footage. Human error happens, so take a deep breath and give the report a second set of eyes.
2. Review Comparable Homes in Your Area
Appraisers will compare your home to other homes in the area, but ideally they should be in the same neighborhood. If you find that they used homes outside of your neighborhood, particularly in less desirable areas, then this could account for the low appraisal.
Your agent is a valuable resource in this process. They can provide a comparative market analysis with a high level of accuracy and detail that the appraisal company can use.
3. Check for Potential Permit Issues
Perhaps you've added onto your home since it was appraised ten years ago. Or maybe you've done other major renovations that required a permit. Whatever has happened, the appraiser may not have given it the value it deserves because of permit issues.
Any improvements you make to your home will require a permit; otherwise, the appraiser will not be able to include them into your home's value.
Often, the biggest issue is that a permit wasn't filed correctly. If the appraiser cannot locate a permit, they may not be able to include a costly upgrade in the appraised value.
4. Ask for a New Appraisal
You need a good argument to convince the appraisal company to take a second look. Write down your findings and present it to them (or to your bank or lender if they arranged the appraisal).
You'll have a much better chance of convincing them to redo the appraisal if you can provide concrete evidence that something may have been amiss.
5. Consult With Your Real Estate Agent
When you're selling a home, there are lots of things that can go wrong (like home appraisals). Your real estate agent isn't just there to take pictures and schedule showings. They can also provide expert guidance on how to overcome the obstacles that stand between you and a final contract.
Clever Partner Agents are full-service, top-rated real estate agents in their local markets who have experience in unique issues, such as combating low home appraisals. Your agent can be an excellent resource in terms of how to proceed when problems arise and with the home selling process at large.
As an added bonus, our Partner Agents work for a fraction of the typical real estate commission, saving home sellers thousands of dollars in the process. If you don't get as high of a home appraisal as you were expecting, the money you save on agent commission may help to make up some of the difference.
Connect with Clever today for a no-obligation consultation and let us introduce you to an experienced real estate agent in your area that can sell your home and save you money in the process.