A few weeks ago I wrote about how my home appraisal was wrong, and how I had to appeal it. Let’s just say that sounds a whole lot easier than it actually was. In fact, I was reading this article on Sunday, which pretty much sums up my story: Appraisers Failing to Appreciate Rise in Home Values. The story mentioned how the National Association of Realtors found that 33% of appraisals in May had problems. I was one of them!
So here is what I did to get my home appraisal fixed.
Starting With My Lender
As I mentioned when I first told my story, my lender had very strict rules it follows for appraisals. Part of their bank’s policy is to only allow one appraisal. The only option if the buyer feels that it is wrong is to appeal it with the appraiser. So I sent in this very detailed letter highlighting the 8 different material problems with the appraisal – no disputes on comparable sales used, just pure factual errors.
What I got back was startling. The appraiser wrote a reply back that said just this: “In the opinion of the appraiser, the report remains valid as is and no corrections/adjustments are necessary”. They didn’t even state why, and the appraisal management company agreed.
As a result, my lender refused to order a new appraisal or do anything else with the price of the home.
A New Lender, A New Appraisal
Luckily, I was following the rules I set out in the Ultimate Guide for Shopping For a Home Loan, and had a second lender which was competing for my business. I immediately called her, and she was able to get an appraisal ordered within 5 days of the appeal letter being denied. This lender did an amazing job getting all the paperwork and appraisal completed in record time.
The appraisal came back at my first offer price, which was a whopping $70,000 higher than the botched appraisal (talk about a discrepancy). Furthermore, this new lender was able to get me a better rate since we waited and rates had gone down in the interim. Finally, she was able to close on time – she closed the loan from start to finish in about 15 days!
We finally got our new home!
It’s Not Over
However, I couldn’t let the bullshit from the first lender and their appraisal stand. After the new appraisal came back, I called the first lender and respectfully asked for a refund of the appraisal fee I paid, since it was incorrect. I then sent them a copy of the new appraisal (which actually used 4 of the 6 comparable sales from the original), and highlighted all the factual errors in their appraisal.
The poor loan officer couldn’t do that, but she sent it to her supervisor. The supervisor initially refused to offer me a refund, but suggested that if I could get the State Board of Appraisers to agree that the appraisal was faulty, they would agree to refund my money. For a $450 refund, I thought “what did I have to lose?”.
I went to the website and filled out a complaint form, and provided all the information. I included:
- The faulty appraisal
- The appeal letter
- The MLS of the comps
- The appraiser’s response
- A copy of the new appraisal
A day after closing my property (2 weeks after the whole debacle occurred), I heard back from the State Board, who agreed that the appraisal was, in fact, faulty, and that they are recommending the appraiser take additional continuing education classes as punishment.
I sent this letter to my lender, who agreed to refund my money! Victory!