How to Dispute an Appraisal and Win

An appraisal represents a professional and impartial opinion of a property’s value, typically prepared by a licensed or certified appraiser. This valuation serves various purposes, including facilitating real estate transactions, supporting mortgage lending decisions, and establishing property tax assessments. When an appraisal’s conclusion appears inaccurate, it can significantly impact financial outcomes, such as the amount of a loan, the sale price of a home, or the annual property tax burden. Disputing an appraisal involves a structured process that requires careful review, documentation, and formal communication. Understanding the components of an appraisal and the established procedures for challenging its findings is important for property owners.

Understanding the Appraisal and Identifying Issues

An appraisal report provides a comprehensive analysis of a property’s value, relying on various data points and valuation approaches. Key sections include a detailed property description, an analysis of comparable sales, and adjustments made to those comparables to reflect differences from the subject property. Appraisers commonly use the sales comparison approach, analyzing recent sales of similar properties, the cost approach to estimate rebuilding costs, and the income approach for income-generating properties.

Reviewing these components can reveal inaccuracies or misinterpretations that may warrant a dispute. Common errors include factual inaccuracies concerning the subject property, such as incorrect square footage, an inaccurate number of bedrooms or bathrooms, or misstated features like a garage or a finished basement. Discrepancies in lot size or unreported significant upgrades can also lead to an undervalued assessment.

Scrutiny involves the comparable sales selected by the appraiser. Issues may arise if chosen comparables are too geographically distant, significantly different in age or architectural style, or if sale dates are outdated, failing to reflect current market conditions. The appraiser’s adjustments to these comparables, which account for differences in features or condition, also warrant close examination. Misinterpretations of the property’s condition, such as overlooking recent renovations or overstating deferred maintenance, can materially impact the final valuation. A failure to adequately account for specific local market factors or recent shifts in neighborhood values can lead to an appraisal that does not accurately reflect the property’s true market worth.

Gathering Supporting Information

To dispute an appraisal, a property owner must compile specific documentation to support their claims. This evidence should directly address inaccuracies or omissions within the appraisal report. A primary focus involves identifying additional comparable sales, often called “comps,” that the appraiser may have overlooked or undervalued. These new comparables should be recent sales, ideally within three to six months, and located within a one-mile radius of the subject property. They should also possess similar characteristics in size, age, condition, and architectural style to provide a strong basis for comparison.

Documentation of property improvements or renovations not adequately recognized in the appraisal report is essential. This includes providing contractor invoices, permits, and before-and-after photographs to demonstrate the scope and quality of upgrades such as kitchen or bathroom remodels, new roofing, HVAC system replacements, or window installations. For factual errors, such as incorrect square footage or lot dimensions, providing official surveys, detailed floor plans, or updated county assessor records can serve as conclusive evidence.

Evidence of current market conditions that contradict the appraisal’s conclusions can strengthen a dispute. This might involve recent listing prices for comparable properties, pending sales data, or information regarding the average days on market in the immediate neighborhood, indicating a more robust market. Real estate agents can be a valuable resource for accessing Multiple Listing Service (MLS) data, which includes comprehensive details on recent sales and current listings. Public records, accessible through county assessor’s offices or local government websites, provide property characteristics, tax histories, and previous sale prices for the subject property and comparables.

Initiating a Reconsideration of Value

Once supporting information is gathered, formally initiate a “reconsideration of value” process. For mortgage-related appraisals, this request is typically directed to the lender or the appraisal management company (AMC) that ordered the appraisal. The communication should be a formal written request, clearly stating the intent to dispute the appraisal’s findings and referencing the property address and appraisal report number.

The request should systematically present the supporting documentation, cross-referencing it with the original appraisal report to highlight discrepancies. Many lenders or AMCs may have a specific form or preferred format for submitting requests, which they can provide upon inquiry. Adhere to their guidelines for submission, ensuring all evidence is clearly organized and easily reviewable. The request should be addressed to the department or individual designated by the lender or AMC for appraisal disputes.

Upon submission, the lender or AMC will review the provided information and may forward it to the original appraiser for a response or a revised report. In some instances, a different appraiser may review the initial appraisal and new evidence. The timeline for a response can vary, but generally, a property owner can expect a decision within five to ten business days from submission.

Further Avenues for Dispute

If the initial reconsideration of value does not result in a satisfactory outcome, other avenues for dispute may be pursued, depending on the appraisal’s context. For mortgage appraisals, if the lender’s internal review does not resolve the issue, escalating the matter internally within the lender’s organization might be an option. This often involves appealing to a higher-level review department or a senior manager overseeing appraisal operations.

If concerns persist regarding the appraiser’s conduct or adherence to professional standards, filing a complaint with the state appraisal board is a potential next step. These boards license and regulate appraisers, investigating complaints related to ethical violations, negligence, or non-compliance with appraisal standards, such as the Uniform Standards of Professional Appraisal Practice (USPAP). A state appraisal board investigates the appraiser’s actions and methods, but they generally do not re-appraise the property or change the valuation.

For property tax appraisals, distinct from mortgage appraisals, the dispute process typically involves appealing to a local property tax assessment board or similar municipal body. Property owners usually have a limited window, often 30 to 90 days after receiving their annual assessment notice, to file an appeal. The appeal process requires submitting evidence similar to that used for mortgage appraisals, including comparable sales that support a lower valuation and documentation of property condition issues that negatively impact value. These boards often conduct hearings where property owners can present their case, challenging the assessed value and potentially reducing their annual property tax burden.