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Appraisal Disputes: How To Request A Reconsideration Of Value From Your Lender

Kevin Graham6-minute read

July 13, 2021


You found the perfect home and you’re ready to move forward with closing on a mortgage and getting the keys. But then you got hit with a low appraisal and efforts to renegotiate or bring more money to the table aren’t going to work. You’re not out of options yet. If you can make a good case that the appraiser made a mistake, you can file an appraisal dispute.

What Is An Appraisal Dispute?

An appraisal dispute involves challenging the value of a home as determined by an appraiser. In order to challenge an appraisal, you must have good reason to believe that the appraisal was wrong. However, the reasons for appeal can’t be emotional in nature.

For your best chance at successfully disputing a low appraisal, come prepared with evidence-based research about potential home improvements the appraiser missed, errors in the report, or inequivalent comparable real estate. Once you’re empowered with this information, submit a reconsideration of value request to your lender.

Although a lender can’t ask an appraiser to give your property a specific value because the appraiser has to remain independent, if they find your request is well supported, they can ask the appraiser to take a second look at your appraisal.

Before going the route of a dispute, as a buyer, you should know that a low appraisal isn’t always a bad thing. One of the purposes of appraisals is to protect the buyer from overpaying for a property.

This is where having an appraisal contingency in place can be extremely important. An appraisal contingency gives you the right to renegotiate the price if the appraisal comes back lower than your agreed-upon purchase price. If there’s no agreement after renegotiating, you can walk away and get your deposit back. If you don’t have an appraisal contingency, you could walk without your deposit or bring the difference between the appraised value and the purchase price to the closing table.

If your real estate agent finds other comps that support the sale price, you might still move forward with a reconsideration of value. This could save you from having to bring extra to the closing table if you still have your heart set on the home and the seller doesn’t want to come down on price.

According to a 2016 white paper from Fannie Mae, 8.2% of appraisals came in 2% or more lower than the asking price. If that happens to you, it’s important to have a working knowledge of every tool in the toolbox, including reconsideration of value.

Whether you’ll have to pay for a reconsideration of value is going to depend on factors such as whether a second appraisal is needed, the reasoning for the reconsideration request and the type of loan you’re applying for. Your lender will be able to walk you through the process.

Common Reasons For A Low Appraisal

There are a number of factors that can lead to a low appraisal. Sometimes the issue is on the side of the appraisers, or maybe homeowners are just not being realistic in the way the property is priced. Let's run through some scenarios.

Appraiser Uses Inadequate ‘Comps’

Appraisers use comparable properties (also called comps) in order to evaluate how much your property would be worth if it sold today and that’s how they come up with the value of your home.

There are several factors that can make a property a good comp. They include:

  • Same property type: Three-bedroom ranches would be compared with other three-bedroom ranches.
  • Similar square footage: A starter home wouldn’t be compared to a McMansion.
  • Proximity: The closer the comparables, the better. Ideally, they are in the same neighborhood.
  • Time of sale: The closer the sale is to the time when the property you have your eye on is being sold, the better the comp is going to be.
  • Similar features: if you have an inground pool or an updated kitchen, the best comparables have those features as well.

If your real estate agent is able to find better comps, you may be able to get a reconsideration of the value on that basis.

Drive-By Superficial Appraisal

This was convenient when COVID-19 was at its worst, but the drawback of drive-by appraisals is that they don’t actually see the inside of the home and a lot of it just relies on modeling and public records. This could impede the ability to get accurate property values. Therefore, you may be able to work with a lender if you can find more accurate comps, for example.

Recent Home Improvements

One of the things that can help increase the value of your property on a reconsideration is to bring up home improvements that increase the home’s value. One of the key factors to consider is whether recent sales of homes with similar features backup your assertion of increased value. If you and your real estate agent can find those, you may find that you have a good case.

Clerical Errors

Everybody makes mistakes, and appraisers are not immune. This process may actually be led by your lender. If they find an omission or need something clarified, find something that was calculated incorrectly or any other mistake, they may ask for the appraiser to resubmit.

New To The Area

If the appraiser is new to the area, they may not be as familiar with the market and unable to find appropriate comparables for recent sales. In a perfect world, this doesn’t happen, but if it does, you can work with your real estate agent and lender to possibly get a reconsideration of value.


We’ve gone over various ways in appraisal might go wrong, but they’re usually right. It’s important when you’re appealing to ask yourself if it’s based on emotion. Are your assessments really based on market value or is it more about what the home means to you? If it’s the latter, there’s a good chance a reconsideration of value won’t produce what you want.

The issue of emotion may not come up as often when you’re buying a home as when you are refinancing because people buying haven’t developed an attachment to a property yet, but always be sure to quickly check your reasoning.

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How Long Does A Reconsideration Of Value Take?

The amount of time a reconsideration of value can take may vary. If the error is clerical in nature, it may be resolved in a few hours. On the other hand, they can take a little longer if the appraiser needs to come out to the property and reevaluate for any reason.

Contesting An Appraisal In 3 Steps

A reconsideration of value isn’t something that everyone does, but if you need it, it also doesn’t need to be difficult to challenge. You just need to be prepared.

1. Talk To Your Real Estate Agent Or Lender

Feel free to speak with your mortgage officer in order to determine what format they suggest you present your evidence in depending on the reasoning for a reconsideration of value.

You should also be in communication with your real estate agent. They can help you find comparables in your area if that’s what’s necessary.

2. Prepare Your Case

The next step is to prepare your case for reconsideration of value. This will probably involve things like finding comps and writing up why they are better than the ones chosen initially by the appraiser. You can also take this opportunity to (politely) discuss why the comps selected may not be the most appropriate.

If the errors are more clerical in nature, you can work with your lender to find out what they need if they don’t reach out directly.

3. Submit Your Paperwork

The final step is just to submit the paperwork through your lender. All you can do after this is cross your fingers and hope for the best, but your job is done.

Appraisal Reconsideration Letter Tips

Appraisal reconsideration requests often come in the form of a letter. When writing your appraisal reconsideration letter, remember the following key tips:

  • Be specific: If you think the appraisal is flawed in a way that affects the valuation of the property, politely point out what the flaws are. If you have specific issues that are material to the value of the property, it makes your case stronger.
  • Suggest alternative comps: If you think there are better comps for the property, be sure to state why and name those comps. Keep in mind the guidelines from earlier for what makes a good comp – things like more recent sale dates, more similar square footage, and being closer in terms of style and square footage.

The Bottom Line: Appraisal Disputes Can Save Your Home Sale

Appraisers evaluate tons of homes, but they’re not incapable of errors. If you can find better comps or there’s a material error of fact or a problem with the way your appraisal was done, you may have a case for a reconsideration of value and a new appraisal report. At the same time, it’s important to make sure you’re not reacting with emotion. Are your assessments truly based on market value?

Now that you know what to expect if you run into appraisal issues, you can be even more prepared to buy a home or refinance. Apply online or give us a call at (833) 326-6018.

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Kevin Graham

Kevin Graham is a Senior Blog Writer for Rocket Companies. He specializes in economics, mortgage qualification and personal finance topics. As someone with cerebral palsy spastic quadriplegia that requires the use of a wheelchair, he also takes on articles around modifying your home for physical challenges and smart home tech. Kevin has a BA in Journalism from Oakland University. Prior to joining Rocket Mortgage, he freelanced for various newspapers in the Metro Detroit area.