Appraisals coming in below the expected value or contract price can be a huge impediment to a pending home sale. Of course, appraisal issues can sometimes be unavoidable in areas where the housing market is volatile. Sellers can take steps to avoid an unexpectedly low appraisal but also have options if one is received. 

To get the best bang for your buck, an article by REALTOR® Magazine explores a home’s three main areas to focus on when preparing for an appraisal: the bathroom, kitchen and curb appeal. The seller should focus his or her efforts on these areas to try to get the maximum value for the home. Another option is to leave something for the appraiser that explains the facts of the home, any recent updates or changes, and potentially even neighborhood activity and/or recent relevant sales. The appraiser may choose not to take this into consideration based on their valuation methodology, but it is good for them to have as much as information as possible. 

If the above communications and preparations do not result in what you perceive as the home’s accurate market value, the below explores some options for appealing the appraisal and the complaint process if you feel the appraiser failed to comply with the codes and laws regulating their practice. It is important to note that appraisers are professionals who are trained, must be licensed, and typically must use a recognized procedure and formula to derive a home’s value. However, as with any professional opinion, mistakes are sometimes made, and you may need to resort to the following options.

There are options to appeal certain appraisals. Appraisal Managements Companies (AMCs) are all required to have an appeal process in place, which will vary by company, so you can try this avenue if an AMC is used. If an appeal process is not available through an appraisal firm and you notice that the appraiser has made an error about facts of the home or something of that sort, you may be able to contact the appraiser and notify them of the error. 

Another option is to check with the lender. Many lenders have appraisal review committees, so you should immediately notify the lender if features of the property are misstated or you feel that the appraiser omitted an appropriate, notable comp or home improvement. Regardless of how you challenge the result, remember that appraisers are professionals and try to make an informed valuation based on all that is known to them so attacking their professional judgment is unproductive, to say the least.

Most appeals or challenges will likely only be heard if something was misstated, omitted, or wrongfully included in the valuation formula, not just because you feel that the valuation is too low. 

As a last resort, if a REALTOR® has an issue with an appraiser because of a perceived failure to comply with the Uniform Standards of Professional Appraisal Practice (USPAP), the Alabama Real Estate Appraisers Act, or the Real Estate Appraisers Administrative Code, a complaint process is available against the appraiser with the Alabama Real Estate Appraisers Board (AREAB). Note, AREAB does not resolve disputes about appraisal values and will not process complaints for disagreements with value conclusions if the appraiser’s method is recognized and accepted in the profession. However, if, for example, the appraiser was not complying with USPAP in being geographically competent to perform the appraisal, this could potentially be adequate grounds for a complaint. AREAB requires the complaints to be in writing and signed by the Complainant (anonymous complaints are not considered for any reason). A complaint is a serious matter that would subject the appraiser to disciplinary action, including possible suspension or revocation of his/her license. Should you have an issue where you feel an appraiser was truly not complying with the above-mentioned laws and regulations, you can go to the Real Estate Appraiser Board’s website for the full process here as well as complaint instructions and forms here.