Things to Consider When Challenging Appraisals
I recently received a call from a Keller Williams agent seeking insight into how to rebut an appraisal on a home in Roswell. The appraisal had come in below the contract price, and her clients, the sellers were unwilling to adjust the price to the appraised value. In an appreciating market where inventory is low, and Buyers are offering more than list price to insure that their offers are accepted, elevated values will often times need to be supported during the appraisal process.
A Recent Appraisal Rebuttal
Below is an appraisal rebuttal for a home in Roswell that specifically addresses the appraiser’s comments and approaches to the appraisal.
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The graphs below provide a 12 month history of Active Listing inventory, the number of Distressed Properties on the market, and the Average Sales Price for Zip Codes 30076 which is the zip code that the subject property is located in, and 30022 which is the zip code which is only a few blocks away, and immediately adjacent the subject property zip code.
Active Listings confirm the appraiser comments regarding market conditions on the first page of the report which indicate that demand is out pacing supply. The appraiser’s comments here seem to directly contradict is comments on page 3, where he suggests that the number of distressed properties on the market is asserting downward pressure on market values.
Distressed Properties The appraiser comments here seem to directly contradict is comments on page 3, where he suggests that the number of distressed properties on the market are asserting downward pressure on market values. Additionally the graph below indicates that the Distressed Property trend is not applying downward pressure on value, but the contrary, as the number of Distressed Properties has declined significantly over the last year.
Average Sales Prices confirm a double digit increase in values over the last twelve months for each of the zip codes.
Appraisers’ comments concerning the lack of adjustment for All Brick construction as opposed to wood, cedar, frame or other materials is void of the industry standard adjustment of 3% for all brick over non-brick comps. Therefore an adjustment of 3% is warranted on this appraisal.
Appraiser states that he does not make adjustments for condition on comps, but instead uses condition as a weight. Since the appraiser is provided options for condition, the appraiser should not only weigh the comps but also adjust for condition.
Van Purser is a licensed real estate broker in Georgia. Since1981 he has successfully purchased and renovated over 400 homes. His expertise is in the area of foreclosures, rehabs and fixer uppers. Additionally, he has represented hundreds of clients over the years as a broker with Metro Brokers, RE/Max and now with his own firm. He and his wife, Jeanne, who is also a broker, have been happily married since 1977. Van can be reached at 770-623-3313 or by email VanPurser@VanPurser.com