mortgage

Homeowners can have a say in appraisals

When a home is being sold, appraisers say they generally don't hear complaints as often as in refinance transactions. For one thing, if a homebuyer wants to purchase at a certain price and then finds that the appraised value comes in lower, the buyer often renegotiates the price. But in cases where the buyer wants to proceed, McCarthy says it's usually the seller's or buyer's real estate agent who submits data in support of a certain value.

Winning your appeal

Yes, mistakes happen, appraisers say. But it will take some homework to bolster your case that your home is worth a certain amount. And even then, you can't necessarily expect the appraiser to agree with your argument.

Appraisers say any professional will turn a deaf ear to impassioned pleas such as, "Are you crazy? My house is the best one on the block."

What could work is: "You didn't describe my house correctly -- it has four bedrooms, not three." What could work even better is gathering paperwork with descriptions and pictures to bolster your case, says Ron Phipps, owner of Phipps Realty based in Warwick, R.I.

Such careful documentation could prompt an appraiser to re-evaluate his or her conclusion.

However, the nuances of appraisal rules sometimes negate a homeowner's argument, says McCarthy. "They may say, 'You made a mistake, I have four bedrooms.' But if it turns out that fourth bedroom is located in a basement, it's not (going to change the valuation)," he says.

Factoring in foreclosures

To be sure, housing markets today are affected by an unprecedented number of foreclosures.

Should that empty home two blocks away with the overgrown lawn that the bank sold at a fire-sale price really be considered a comparable value to your pristine home?

That's a difficult call, says McCarthy. If it's the only distressed sale in the neighborhood, it can probably be eliminated. But if other foreclosed sales are nearby, they count.

Moreover, many new lending rules, like those for loans backed by the Federal Housing Administration, require appraisers in markets where prices have been declining to not only consider values of recently sold properties, but listing prices on homes currently for sale. For instance, if a bank is having difficulty selling a foreclosed home and reduces the price every three weeks, that lower listing might be used in the comparison.

Getting the loan

Finally, even if you do document that your home is worth a certain amount and the appraiser ultimately agrees, you still may not qualify for a loan based on that value. It's ultimately up to the underwriting staff of the loan company to accept the revised valuation, says Amorin.

"I have rarely heard that banks will not consider (the new value)," he says. "But I'm not suggesting it never happens."

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