Appraisers Are Not Making Many Friends in Denver Metro Real Estate Market

What Is An Appraisal? An appraisal is an “opinion” of how much a home is currently worth. Calculations are based on similar homes nearby that have sold within the past 6 months (these are called comparables).  Lenders require it when the buyer is paying for the home with a new loan.

What Do They Look At? Condition, location, features, size, etc. What they have a difficult time compensating for are market factors that drive prices up or down faster than the data suggests. For example, when inventory is low buyers may pay more than past sales because it’s their only option.

POSSIBLE OUTCOMES:

If a home doesn’t appraise for the contract you can challenge the appraisal. Here are some tips:

1. Be Realistic With the Offer Price: Strong demand for homes is resulting in multiple offers, and some properties are being bid up so high that they won’t appraise. In accepting a bid from a buyer needing financing, a seller would be wise to consider whether the offer can match the appraised value.
2. Be accommodating without being intrusive. The change in rules governing appraisals discourages contact between agent and appraiser, but there’s nothing improper about the agent’s being at the home to give the appraiser access and answer any questions. Sellers should not be present because some appraisers feel they tend to get in the way. A good tip is to treat it like a showing. Have the lights on, air conditioner on (if summer), and make it as comfortable as possible.
3. Provide information about the house, including renovations and comparable sales. When your agent greets the appraiser, provide a package with comps, upgrades, and amenities within the development. Pointing out any favorable factors about the home’s location within the community and other characteristics that distinguish it from other nearby homes can prove helpful too.
   The report should also include the dates of major work done on the kitchen, bathrooms, and roof, as well as the closed permits on any additions. Providing receipts can sometimes be helpful too.

If that is not successful the option are: