Home appraisals can feel like judgement day for anxious homeowners.
Appraisers are only human, however. If they get it wrong — and they certainly can — homeowners do have recourse.
A new report by NerdWallet explains that home appraisals are far from foolproof. Even the professionals can miscount amenities, miss major home improvements or, in the worse cases, outright discriminate against homeowners.
Appraisals help banks determine whether than want to extend a home loan, and how much can be borrowed. Valmedia – stock.adobe.comA poor assessment can seriously ding your financial future or sink a pending home sale, as well. Loan applicants pay for this report, although the appraiser works for the lender. Their work is used as an objective assessment of a home’s worth in comparison to nearby properties, the condition of its size, updates and location, as well as its viability as collateral for a mortgage.
Licensed appraisers’ opinion of your home’s value is vital for banks to determine whether an owner’s home is eligible for most kinds of loans. The valuations are also important for buyers and sellers, who both want to make sure they’re getting the best deal.
Appraisal reports are freely available to homeowners — it’s vital that you review yours for mistakes. Andrey Popov – stock.adobe.com
Consider submitting a “Reconsideration of Value” to the bank. auremar – stock.adobe.comWhether you’re getting an appraisal to qualify for a loan or sell your house, it’s critical that homeowners scour those reports for human error.
Objective assessments can contain subjective mistakes, according to NerdWallet. Appraisers can make costly blunders on a variety of check-list items, including in the number of bedrooms, square footage, amenities, garage type or roof condition. A major home improvement could be accidentally left off of the report, as well.
NerdWallet advised homeowners to always get their hands on their official appraisals. When appraisals are done for a bank loan, the lenders are required to send a free copy to the applicant at least three days before the loan closes. Home sellers can expect to receive the report as part of the mortgage process.
If the appraiser made a mistake, the owner can submit what is called a “Reconsideration of Value” to their lender. This document includes any additional information or missing items that would add to the valuation of your home, like comparable sales that should have been considered by the appraiser.
A seller’s broker can be a useful ally when an appraisal comes in lower than expected. New Africa – stock.adobe.com
Fair housing laws forbid discrimination on the part of home appraisers, and gives owners recourse when it occurs. Gorodenkoff – stock.adobe.comYou can also ask for a second appraisal, according to NerdWallet, or start over with a brand new lender — it will cost you several hundred dollars, however. It’s important to not that if you have a mortgage backed by the Federal Housing Administration or the Department of Veterans Affiars, you might be able to refinance without and appraisal.
Home sellers luckily have an ally — their broker. The seller can ask their real estate agent to pass along appraisal issues to the potential buyer, and ask that buyer to submit the information to their own lender.
Discriminatory appraisals are far from a new phenomenon, but there are modern tools at your disposal if you expect that you were discriminated against for your race, color, religion, sex, disability, family status or national origin in the appraisal process.
Complaints of discrimination by lenders — including using an unfair appraisal — can go straight to the Consumer Financial Protection Bureau. Owners of unfairly judged homes can also lodge a fair housing complaint directly with the Department of Housing and Urban Development’s Office of Fair Housing and Equal Opportunity. A local fair housing center can help you navigate the process.
