What if the value of my appraisal isn’t what I expected?
In a rapidly changing market, buyers and sellers are often surprised when the appraised value is higher or lower than expected. A higher value will not have an impact on the loan approval process, but a lower value can. The lower appraised value is used to determine an acceptable loan amount, which is generally up to 80% of the appraiser’s opinion of the home’s value.
As we’ve discussed in other posts, you typically won’t get a dollar-for-dollar return on the money you spend within your home, especially for personal preference items.
An appraiser can only work with the information that is available to them. (They aren’t mind-readers) Sometimes a lender will send over incomplete information, or dated plans that didn’t include the full information about the property. If you believe that the appraisal is missing relevant data that could affect the opinion of value, you can work with your lender and the appraiser to address these concerns. Sometimes it may change the opinion of value, other times the opinion of value will remain the same even with additional information.
An appraisal is created with an “effective date of appraisal” meaning that the information gathered was available on or before that date. Occasionally clients return to the appraiser wondering why they didn’t include certain comparable sales. An appraiser will take these into consideration if they are deemed to be reliable comparables. But more often than not those sales took place after the effective date of the appraisal and therefore would not have been available to the appraiser and cannot be included in the appraisal.