With record-low interest rates potential home buyers are seeking
to buy and current homeowners are seeking to refinance. But low appraisals are making it difficult or
even impossible for some borrowers to take advantage of this boon in record-low
interest rates. The problem stems from the fact that home prices have plummeted
even further than first anticipated, as wells as laws and rules enacted by
legislators and lenders in the wake of the financial crisis which seek to eliminate
inflated appraisal valuations and improper pressures on appraisers as seen in the
housing boom have now resulted in an “over-correction” or unnecessarily
conservative valuations. Also, accurate valuation for appraisals may be hard to come
by when sales in the real estate market have been so anemic. There are steps, however, that you can take for a
purchase or refinance transaction in order to increase the odds that your mortgage is approved and
your deal gets done. • Know what the range of value is for your area by looking at comparable
sales from the last three to six months; • Accompany the appraiser during the inspection, pointing out features
and improvements that add to the home's value; • Although chances are slim, request that the lender review the appraisal findings, especially if you think the appraisal is unusually low, contains factual errors, such as the number of bathrooms and so forth, or you have more recent comparable sales that were not available at the time the appraisal was initially done and submitted; and • Start over with a new lender if your original financing falls through. For more information on this topic, see Wall Street Journal article entitled, Fighting Back Against Lowball Home Appraisals. |