“It is too late and too costly to wait until the appraisal is completed to realize there is a problem with appraiser competency. Upon completion of the report you may find the appraisal report ignores the high performance features completely (no listing of them and no analysis), the completed AI Residential Green and Energy Efficient Addendum is not included, and the energy modeling reports were not included or discussed. This is the first sign of errors that should be addressed in challenging the appraisal results.”

“When the report is insufficient in detailing and analyzing the high performance features, the borrower must be their own advocate to challenge the appraisal. Just because you do not like the value is not a reason to challenge or call an appraiser incompetent.  Lenders cannot hire a second or third appraiser just because you do not like the value.  They must have sufficient reason to believe the appraisal is insufficient and the issues cannot be resolved with the original appraiser.  If a second appraiser is hired, it usually means the borrower is paying for two appraisals.”

Quotes: Sandra K. Adomatis, SRA, LEED Green Associate

Challenging an Appraisal

Do not approach the appraiser directly – you are not the appraiser’s client. The lender is.

The borrower should ask the lender for a “Reconsideration of Value,” which is a formal request that lenders must track and respond to.

The borrower will most likely have to pay for any second appraisal.

Challenges must:

• Be in writing
• Based on error of fact(s) or omission
• Based on inconsistencies
• Addressed with the lender directly
• Addressed in a timely manner

Challenges cannot be based on, “I don’t like the value of the appraisal!”

“If an appraiser assigns no value or a ZERO to a particular item that implies it has been analyzed and requires as much support as a $20,000 adjustment? That is a hard fact to address for underwriters, reviewers, and appraisers.”

Quotes: Sandra K. Adomatis, SRA, LEED Green Associate

If an appraiser is hired by a loan applicant to assist in challenging an appraisal, the appraiser providing such support must be careful they are not providing a review or they will have to meet [USPAP] Standard Rule 3. Such support should focus on the property and feature descriptions and methodology used. “Were the energy efficiency and/or renewable energy features analyzed with support in the appraisal to explain the conclusions? Was the appraiser qualified to appraise this type of property? This would come from reviewing the appraiser’s qualifications that should be in the report.”