A Falling Appraisal in a Rising Market
My clients and friends know they can ask me questions about Real Estate any time; I am always happy to help.
Most of the time people ask me before they take action. I like that best because it gives me the most opportunity to help someone. Every now and then, someone asks after the fact.
In these cases, sometimes we can help and sometimes it is too late.
When in doubt, just ask. Don’t think you are bothering me.
Here’s a good question I ran across the other day from a homeowner (not a client). They bought a house early in 2015 in a rush and did not get the best mortgage to meet their needs. They decided to refinance in the New Year and started the process.
They did not have a strategy or a plan and once again trusted in the process. When their refinance appraisal came back, the value was 3% less than they paid a few months earlier. In addition, the new loan required PMI (Private Mortgage Insurance) for 4 years due to the appraisal even though they put 20% down initially.
Needless to say, the refi fell through. They felt cheated out of their time and the $450 for the appraisal.
They wanted to know if they should file a formal complaint.
I explained that it is easier to do it right the first time than to go back and try to fix this mess. When we sell a home, we put together a packet of information about the home and recent comps for the appraiser. Sometimes it is 30+ pages long. We also provide a tour of the home and answer any questions the appraiser has immediately. It helps to build a case for the value of the property. We can’t set the value, but we can provide honest data and information that supports our claim.
For the best success, I recommend that you do this same process when you refinance your home.
Let me know your questions about the real estate market or your Nashville home in the comments below.
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