As an appraiser, you do your research, spend hours on the home appraisal report, submit it and move on to the next one. Days or weeks later, you get an email, most likely labeled as “Dispute” or “Reconsideration of Value” which no appraiser likes to receive. However, this email should actually be seen as an opportunity to explain to the intended user your rationale for the actual market value and provide the agent or borrower support for negotiating a sales price that is reflective of the actual market value. A few tips on navigating a dispute:
Don’t take it personally:
Normally, a dispute should not frustrate or insult you. If the lender or AMC invested the appropriate time and effort into qualifying the information and the language within the dispute request; the dispute provided back to you will reflect a sale, information or circumstance that you might have overlooked or been unaware of that may have altered your appraisal. There is nothing wrong with a second set of eyes or a second opinion if the information provided is accurate and applicable. Remember, this is only business.
Put your dispute to work:
When the value of the home is much lower than the value the seller and their broker had hoped to receive, the broker will often renegotiate to a lower sales price. Therefore, it is critical to address an appraisal dispute quickly and avoid fracturing the relationship that this lender has worked so hard to secure with the agent or broker. If you remain objective and take the time to thoroughly address the dispute, you will often end up assisting the agent by giving them data to support a sales price that reflects the current market and help keep a healthy relationship between the agent and lender. This is an opportunity to provide value, protect your client from over-lending and create trust.
Know your audience:
The appraisers that see a high number of disputes aren’t typically wrong, they are often simply writing the appraisal from an industry insider’s point of view, leaving too many unanswered questions for the non-appraiser reader. These reports often lack details that could help clarify important points relating to the value, like a paragraph synopsis of the appraiser’s findings and a thorough description of the market in question. When an appraisal is written from an educated storyteller’s perspective, that appraiser will rarely or never receive a dispute. The takeaway? Communicate important points in a way that everyone in the transaction can understand.
The appraisal is an important step in the loan process and we, as appraisers, play an important role. And while disputes can slow down the process they might actually provide an opportunity to improve customer relationships for everyone. Lenders and AMCs rely on appraisers to provide clarity and transparency in the valuation process. The next time a dispute or reconsideration comes your way, look at it as an opportunity to secure your relationships with your client.
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