My agent wants a reconsideration of value on an appraisal $18k under contract

Question

House is under contract at $332,000, buyer's lender ordered the appraisal, it came back $314,000. Two of the three comps the appraiser used are older houses with original kitchens and one is across a busy arterial that everyone here treats as a boundary. I have three closed sales that fit better. My agent says file a reconsideration of value with the lender. But somebody in another thread told me flat out that you are never allowed to contact the appraiser about a value, that it's an independence violation, and now I'm not sure if the reconsideration thing is even real or if my agent is about to get someone in trouble.

Rena Guide · Accepted Answer

A reconsideration of value is real and it's a formal, documented channel. It goes through the lender, or the AMC the lender used, not through a phone call to the appraiser. The lender passes your material to the appraiser, the appraiser reviews it and either revises the report or writes up why the original conclusion stands.

What the independence rules prohibit is pressure. Nobody with a financial interest in the deal may ask an appraiser to hit a number, imply future work depends on the value, or coach the conclusion. Giving the appraiser factual information they may not have had is a different act, and it's exactly what the ROV process exists for. The details of how that's handled vary by lender and by state, so ask the loan officer for their written ROV procedure before sending anything.

What actually moves the needle: closed sales, with dates, addresses and enough detail to show they're more similar than what was used. Pending sales and your own opinion of the arterial road generally don't. If your better comps closed after the appraiser's effective date they may not be usable at all.

One thing to sort out before you spend a week on this. The appraisal belongs to the lender and the borrower paid for it, so as the seller you often can't file the ROV yourself. You hand your comps to the buyer's side and they submit it. And be ready for the answer to be no. A large share of ROVs come back with the value unchanged, which leaves you renegotiating, the buyer bringing cash to cover the gap, or the buyer changing lenders and starting a fresh appraisal at their own cost.

devon_pierce · Answer

So closed only? What happens with a brand new subdivision where everything comparable is still under construction and nothing has closed? Feels like an appraiser has nothing to work with.

derekj19 · Answer

The AMCs I've looked at all have a form for this, three comps maximum, and a box where you have to state what's factually wrong with the report. If you write "value seems low" in that box it gets closed same day.

tashaford30 · Answer

I'd be the buyer in this situation and honestly a $314k appraisal on a $332k contract would make me want the price at $314k, not want the appraiser overruled. Worth remembering the other side has no reason to help you push.

mikeoconnell7 · Answer

flint, the arterial road thing is a legitimate argument if you can support it. Not as an opinion. If houses on the far side sell for 8 percent less across the last twenty sales, that's a matched pair analysis and it's the kind of thing an appraiser can actually put in a report.

nataliehsu · Answer

Does the appraiser get paid extra to redo the analysis? Genuine question, because if not I understand why the answer is usually no change.

ryanmck27 · Answer

plumb, from what supervisors have told me, an ROV response is usually unpaid work, sometimes a $50 to $100 fee from the AMC if you're lucky. Two hours of rework for nothing. That's part of why the tone of the submission matters so much.

tonyv88 · Answer

One thing that gets missed on gaps like this: check whether the appraisal report flagged any repairs as required. A subject to completion condition can kill the loan even after the value question is settled.

monica_tran3 · Answer

$18k on $332k is 5.4 percent. That's inside the range where I'd expect a split, seller drops some, buyer brings some, and everyone stops paying lawyers to argue about kitchen adjustments.

mitchell_ray4 · Answer

If you replaced the HVAC or the roof and it wasn't in the MLS listing, put the invoices and dated photos in the packet. Unrecorded work is the single thing an appraiser genuinely can't see from the data.

angela_burke · Answer

Budget five business days minimum for an ROV round trip, sometimes more if the AMC has a review queue. If your contract has a hard closing date, get an extension signed before you start the process rather than after it stalls.

My agent wants a reconsideration of value on an appraisal $18k under contract

12 replies