San Diego Real Estate Blog

MAKING SENSE OF THE STORY FOR CONSUMERS

• Generally, lenders order a low-cost electronic valuation—based on publicly available statistical data—to review the accuracy of the information submitted by the appraiser. If there is a discrepancy between the electronic valuation and the appraiser’s report, the lender’s underwriters may reduce the appraisal figure.
  
  
• In some instances, real estate agents and consumers have reported that reduced appraisals have led to the derailment of home sales transactions, as some buyers refuse to pay more for a house than the appraisal says it is worth.
  
  
• This industry practice may soon change. In guidelines issued June 30, Fannie Mae said lenders must contact appraisers to resolve discrepancies between the valuations, rather than simply reducing the appraisal. If it is not possible to contact the appraiser, the lender should order a second appraisal.
  
  
• Borrowers and/or sellers who believe a home valuation is too low may appeal the valuation or request a second option. It’s important to note that the second valuation must be more than five percent higher than the first—anything less is considered an acceptable difference.

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