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Drafting a Reconsideration Letter ( A Rebuttal) To a Low Appraisal
Your buyer is ready to buy, you are ready to sell and the bank appraisal comes in below the contract price. That can mean the buyer must come up with more down payment money, or you can lower the price or you lose the deal. OR, you can write a reconsideration letter ( a rebuttal) to the low appraisal. The President of the American Capital Corporation, a mortgage broker and lender in California, though this approach may not always work it is worth the effort if you feel the appraisal is in error. It is has been proven that evidence of incomplete work or inaccurate work on the part of the appraiser can persuade the lender to assign a new appraisal.
The National Association of Realtors reported statistics show that appraisal problems have had an impact on the selling of homes. Real estate agents in May 2013 noted that 9% of agents reported contact cancellations, 10% reported a delay and 13% reported lower sales price negotiations due to low appraisals.
When considering challenging a low appraisal be sure keep emotions out. A reconsideration letter (a rebuttal) should be limited to the factual errors, any flawed methods used by the appraiser and/or additional new comps or missed comps that would be comparable to your home sale. The following list, from a recent Wall Street Journal article gives some guidance on how to challenge a low appraisal.
Letters are usually drafted by the borrower, with help from the real-estate agent and a hired appraiser.
Stick to the facts, avoiding emotional pleas.
Include data, exhibits and professional opinions to support claim of errors in the appraisal.
State that if flaws aren’t promptly corrected, the appraiser will be reported to the licensing board for further in investigation.
Have the reconsideration letter (rebuttal) professionally bound and sent to all the parties in the transaction.