The reason I ‘m attaching this to the file about Real Estate Appraisal Changes. I’ve been to many seminars about mortgage changes and agents didn’t have a clue that their was a condition rating and it changes the formula and either increases or decreases value. If the Realtor got in the business after 2011 they don’t understand the rules. Why is that important? Most homes built, and sold where prior to 2011 and purchased during the bubble. After the crash of “2008″, there are still many homeowners that have not totally recouped their losses, especially in the higher price ranges.
In my opinion, if you don’t want to sell using the Price Driven approach alone and give your home away….you need to have a Realtor that understand the Real Estate Appraisal rules and the different approaches so you can put more money in your pocket.
The most important piece is in Part 1
Understanding the condition rating system and how it works will help determine Value. Make sure you make a list of all the improvements updates with dates. This does change the formula and value of your property. The lender verifies all condition ratings through the 2nd Phase of the underwriting system. If they don’t match, the appraisal goes back to the appraiser to make the adjustments and in most cases the value changes. When there is a questionable appraisal, I ask the appraisal so I can check. I have experience with disputing appraisals, and other lenders have contact me to look at an appraisal they are having a hard time with . Of course they black out all the confidential information and we will break down the numbers step by step to see if there is grounds for a formal dispute. Most cases the appraiser won’t change his appraisal even it’s bad, we just need enough proof to have the 1st appraisal thrown out and order a new appraisal.
What Can you Do?
Well, you could have major issues if you don’t challenge the appraisal. Some lenders don’t allow you to dispute an appraisal even if they know it’s bad. Some agents don’t know how either, I would recommend you asking agents what is your experience is appraisal disputes before you hire them. You do have choices, ask the buyer to switch lenders if they won’t fight for their clients best interest. Renegotiate price with the buyer. Buyer’s usually won’t pay more than what the bank says it’s worth, if they can pay less their happy. Lastly, void the purchase agreement and start over. As part of my services, when I contact the lender on your behalf this is one of the questions I ask, “How do you handle appraisal disputes”. You need to know that upfront before you accept an offer. I know of lenders that use conservative appraisal firms and you can bet the appraisal is coming in lower. You need an agent that knows how to work through the appraisal system, if you plan on having any success in fighting a bad appraisal , and know up front before you commit to the sale of your home. To view the appraisal changes…
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