As a seller, can I dispute an appraisal made by the FHA on behalf of buyer?

As a seller, it can be frustrating when an FHA appraisal comes in lower than expected. While FHA appraisals are conducted by independent fee appraisers, there are still some options for recourse in certain situations: If you believe the FHA appraisal is significantly lower than comparable houses within a one-mile radius, you can ask your buyer's lender to request a reconsideration of value. You will need to provide evidence to support your claim, such as recent comparable sales data, showing the appraised value is incorrect. The lender will then forward this information to the appraiser for review. It's important to note that the final decision still rests with the appraiser. If the person who inspected the house is not the person who presented themselves as the appraiser, it could be considered fraud or a violation of FHA guidelines. You should report this issue to the buyer's lender and the FHA. They may investigate the situation and take appropriate action, such as ordering a new appraisal or reassigning it to another appraiser. If you believe the appraiser ignored significant upgrades that impact the home's value, you can include this information in your request for reconsideration of value (mentioned in point 1). You should provide evidence, such as receipts or documentation, to support the upgrades' value and demonstrate their impact on the home's overall worth. Also, look at the condition and quality rating in the report. If the appraiser undervalued improvements, you could also address this in your request for reconsideration of value. Provide documentation, such as receipts or invoices, to show the actual cost of the improvements and argue that they should be considered in the home's appraisal value. Remember that appraisals are subjective, and appraisers may have different opinions on the value of specific features or improvements. While you can dispute an appraisal and provide additional information, there's no guarantee that the appraiser will adjust their valuation. If you are unable to resolve the issue, you may need to consider other options, such as finding a new buyer or renegotiating the purchase price.

HI William, as a real estate broker who has contested several appraisals over my career here my answers to your questions: As a seller, you do have the right to dispute an appraisal made by the FHA. You can start by reviewing the appraisal report and identifying any errors or discrepancies. You can also provide additional information or evidence that the appraiser may have overlooked. If you believe the appraisal is significantly lower than the actual value of your home, you may want to consider getting a second opinion from another appraiser. If someone presenting themselves as an appraiser did not actually inspect the property, that would be considered fraud. However, it's important to note that FHA appraisers are licensed professionals who are required to follow strict guidelines and ethical standards. If you suspect fraud or misconduct, you can report it to the appropriate authorities. If you believe the appraiser did not consider all of the upgrades and improvements to your home, you can provide documentation and evidence to support your claim. For example, you can provide receipts, photos, or other information that shows the value of the upgrades. You can also request a reconsideration of value from the appraiser or ask for a second appraisal. If you disagree with the appraiser's ratings and valuations, you can provide additional evidence and documentation to support your position. However, it's important to note that appraisers use a standardized approach to determine the value of a property, and their ratings and valuations are based on a variety of factors, including the condition of the property, the location, and the overall market. If you believe the appraisal is significantly lower than the actual value of your home, you may want to consider getting a second opinion from another appraiser. David Smith Blok & Blvd. Realty 281-732-3090

Hi William!

I see you've had some trouble with your appraisal. I know this post is a month or so old, so I'm hoping everything worked out ok. Unfortunately, appraisals have been coming in all over the place recently. Appraisals have been putting buyers AND sellers in bad positions. It is important to remember that appraisals are subjective...VERY subjective, and sadly, there isn't much that can be done about it. You will want to tell your listing agent that you want to contest the appraisal, and the listing agent will get with the lender to set that process in motion. Just keep in mind that the process will significantly delay or prevent your closing.

Please keep in mind I am not an attorney and this is in no way legal advice!

1-There is generally no recourse unless you can prove fraud. If you go over the appraisal report in great detail, you may or may not uncover some mistakes or variances (square footage is the most common but there are many errors that can appear). Believe it or not, a difference of $20,000 is not that uncommon, but it is worth checking out carefully.
2-The inspector and the appraiser are two completely different entities. The inspector is working for the buyer and the appraiser is working for the lender.
3-As mentioned before, appraising is very subjective. You can order three different appraisals and get three vastly different valuations. Each appraiser may come up with a different value for the entire home, taking many factors into consideration.
4-Again, probably no recourse unless you can prove fraud (but again, please consult an attorney about that). You will usually not get the dollar-for-dollar value when doing upgrades to a home.

I'm sorry this happened to you. I completely understand your frustration! I've been through it before and it is a bitter pill to swallow. I wish you the best of luck and hope this issue got (or gets) resolved to your satisfaction.

Hi William,

Appraisal is an individual opinion of value. Not all improvements will be valued at the price you paid for them. Also- the person who previously inspected property is NOT an appraiser, just a home inspector. Home inspectors do not provide opinions of value, only appraisers hired by your buyer's lender.

Your Listing Agent can request a rebuttal. The lender then will request another appraisal to be conducted. Ask your agent to provide as many viable comps as possible.
They may or may not change the appraisal, but it's worth the shot. You must be prepared for delays though.

Also, on a side note- as an FYI- the FHA appraisal "stays" with the property for 6 months.
Thank you,

Yvonne Chauvin- REALTOR®
MCNE, CNE
Better Homes & Gardens Real Estate Gary Greene
YvonneChauvin@yvonnechauvin.com
Cell: 281-686-0143

Hi William, Appraisers can really throw a wrench into things. Generally the lender fights the appraisal. I hate to say it but it can sometimes weight heavily on if the appraiser is having a bad day. Give me a call and I can link you up with my lender. He loves to help. No charge. Just info. He can answer all of these questions for you. He has 20 years experience. 713-291-5270