With home values on the rebound after the recent economic shutdowns and rising building costs due to the pandemic, some homebuyers are encountering low appraisals for their properties. Lenders rely on these values to determine how much a buyer needs to purchase a home, but when an assessment comes back unusually low, what options does the seller have to dispute it?

While not impossible, disputing a real estate appraisal in Florida can be challenging. Before you go through with a property sale at a lower price than you had hoped, consult with an experienced real estate attorney about your situation.

Disputing a Low-Ball Real Estate Appraisal

Once an appraisal has been made, the appraiser will likely refuse to reconsider their assessment unless you can show a mistake was made in their valuation. Below is a general overview of the steps you will need to take to dispute their findings: 

Hire a Knowledgeable Real Estate Attorney 

Once you have a copy of the appraisal report, sit down with a reputable Florida real estate lawyer to review it. If working with an attorney-led title agency, like All Florida Title Company, then their on-staff lawyer should be already familiar with your property sale efforts and be able to step in and find out why you received a low-ball value. Their assistance will be crucial in gathering evidence to show that another appraisal is warranted to the lender or appraiser.

Reviewing the Appraisal Report 

As mentioned above, your attorney can carefully review the appraisal report and determine if any errors were made or if the comparisons used for your property are not realistic. For example, the reason for your low valuation could be due to the appraiser having assessed your home as part of the wrong neighborhood or having the square footage all wrong. 

If your real estate lawyer finds no errors, the next step may be to assess what homes the appraiser had compared yours and if the current market values line up. 

Frequent categories that an appraiser can get wrong include:

  • Current condition
  • School district
  • Age of the property
  • Home uniqueness
  • Location 
  • Square footage, building and/or lot size
  • Supply and demand for homes in your area
  • Structure type (modular, stick-built, or custom)
  • Sales prices of similar homes nearby in the past few months
  • Average length of time homes sit on the market before selling
  • Price and value trends
  • Renovations performed
  • Zoning rules for the area 

Unofficial Appraisal  

After your attorney has completed the review and conducted necessary research to back up your claims of the first appraisal being undervalued, they will put together a second unofficial appraisal of your home. This provides an opportunity to share additional features that increase the value of your property that the appraiser may have omitted. Additionally, you will include evidence showing that the initial assessment was inaccurate.

Ask for a Second Appraisal 

The next step is to approach your lender and petition them for a second appraisal. Keep in mind that you will likely have the same appraiser, and that’s okay. Because they are already familiar with your property, they will better understand your reasoning for another to be performed. However, there is no guarantee that the bank will agree with your request or that the appraiser will change their opinion.

Can I Hire My Own Appraiser?

This is a popular question we receive at All Florida Title company, and while the answer is yes, know that the lender is not obligated to accept it. While it is nice to have a second opinion, you will have to pay for it, and it only provides you with additional insight into how the first appraiser may have been wrong. 

Avoid Real Estate Appraisal Disputes with a Reputable Title Agency

As you can see, disputing a low appraisal involves significant research and investigation, as well as negotiation skills. At All Florida Title Company, our team works to prevent these issues from occurring in the first place. Because we are founded and led by Attorney Marc Brown, you can be assured that your file will get a personal review so that any information the appraiser receives about your home is accurate.

All Florida Title Company offers an extensive list of services for all of your real estate closing needs, including appraisals. Have questions? Give us a call at 954-566-2200.