Valuation Management Group strives to keep its clients and appraisers informed about best practices in the real estate appraisal arena. An often asked question is, “What is the best way to handle a request for appraisal reconsideration or appraisal appeal?”
Best practice begins with putting the request in writing. VMG utilizes a form titled Request for Reconsideration/Appraisal Appeal. Click here to see an example of this form!
The request should be based on factual known errors, discrepancies or omissions, and/or sales that have been reviewed and are believed to be comparable to the subject property and also recent.
Simply writing that the value is believed to be “too low” or the value should be at least $XXX,XXX, would be considered an opinion and not factual. These types of comments could be considered an attempt to influence or pressure the appraiser, which is prohibited by Dodd Frank. An example of a factual request would be “The appraisal does not notate the recent renovation of the home which includes the kitchen, all bathrooms, new roof, and flooring that totaled $75,000.”
A consideration of additional sales is another reason appraisers would be asked to revisit their original appraisal. An example – There is a very similar home located on the same street as the subject, and it sold within the past 2 months. Suggested sales should have closed within 12 months and preferably be more recent than sales utilized by the appraiser. Also, the proximity should typically be closer to the subject than sales utilized or have strong justification as to why they would be a better comparable. The number of suggested sales to reconsider should be limited to a few that have been researched and appear to be comparable in age, size, quality and amenities. It is up to the appraiser to make the final determination on if the additional sales should be considered as comparables.
Valuation Management Group clients or anyone utilizing an appraisal management company should not contact the appraiser directly to dispute an appraiser’s opinion of value as it could lead to confusion and may bring into question the appraiser’s independence. VMG, as part of our appraisal management services, is the liaison between the client and appraiser to ensure the appraiser does not feel pressured or that appraisal independence has not been breached while addressing the issues, questions or concerns about the appraisal.
Questions about the appraisal appeal process can be directed to Valuation Management Group’s Natalie Thompson, VP of Residential Quality Control, and Shannon Reyome, VP of Commercial Quality Control.
Valuation Management Group is a national, full service appraisal management service company that manages the appraisal process for financial institutions, banks, mortgage bankers, and credit unions. We offer the full array of commercial and residential appraisal products and services. We take the appraisal process from ordinary to extraordinary.