A surprising appraisal can make it difficult to decide what to do next. You might be looking at two reports with different values, or wondering whether a second appraisal is worth ordering at all. Before challenging a conclusion, check whether the reports are answering the same question about the same property at the same time.
Different conclusions do not automatically mean one appraiser made a mistake. A property fact could be wrong, but the reports might also use different effective dates, describe different property conditions, or have different assignment requirements. Understanding those differences helps you decide whether to seek a correction, a review, or another valuation.
What each report was asked to value
Place the reports side by side if you have both. Look for these details before comparing the final numbers:
- Effective date: The date to which the value opinion applies. A lender-ordered appraisal and an estate appraisal ordered later, for example, may describe the same address but apply to entirely different points in time. A report signed later is not necessarily an opinion of value as of its signature date.
- Intended use and users: What decision was the appraisal prepared to support, and who was identified to use it? A report prepared for a lender, for example, may not meet the requirements for an estate or a legal proceeding.
- Property facts and condition: Compare the address, property type, size, bedroom and bathroom counts, lot, improvements and condition described. An addition or repair may have existed for one effective date but not another.
- Scope and assumptions: Look at what each appraiser inspected or relied on, and any stated assumptions or limiting conditions. Different information or assignment requirements can affect the work and conclusions.
If a report describes the property incorrectly, note the specific detail and gather any records that help explain it. A disagreement between two numbers alone does not establish which conclusion is better supported.
Look beyond the closest sale
When you have both reports, look at the sales each appraiser chose and why. Compare the type, condition and location of those properties with the home being appraised, as well as when the sales occurred relative to the appraisal's effective date. An older sale is not automatically unsuitable, and the closest sale is not automatically the best comparison. The question is how well the report explains its relevance to the assignment.
For example, Salt Lake County includes both detached houses and attached homes. If the property is an attached home, a nearby detached sale is not necessarily a better comparison just because it is closer. Property type and the market evidence behind the choice deserve attention. Different sales or adjustments do not by themselves prove an error; a qualified review can examine how the conclusions are supported.
What if you find a possible error?
If something looks wrong, start with the facts recorded in the report, including living area, lot size, room count and improvements. If the reported measurement is in question, relevant records or square footage verification may help clarify the issue. Identify the specific discrepancy and the evidence behind your concern rather than asking for a preferred number. A factual correction does not guarantee a changed value.
For a lender-ordered appraisal, ask the lender about its process for a reconsideration of value, often called an ROV. The lender can explain how to submit relevant information. A private appraisal or review does not automatically replace the lender's report, and the lender decides what it will accept for its transaction.
Review or a separate second appraisal?
An appraisal review is a professional examination of another appraiser's work, including whether the methods, data and conclusions are well-supported. This can be useful when you want a professional to assess the reasoning or support in an existing report. A separate appraisal develops an independent value opinion for its own stated assignment. It is not simply a correction to the first report, and neither service promises a particular result.
A separate appraisal may be worth requesting when you need a value opinion for a different decision or effective date, or when an independent valuation would help you address a continuing concern. For a legal or financial matter, clarify the purpose and date with the professional advising you before ordering. Do not assume a report prepared for a loan will meet the needs of an estate or another proceeding.
You can discuss appraisal review and independent second-opinion services with Irvine Appraising Company. Bring both available reports, note the property and the decision you need to make, and explain the date or dates involved. The firm can discuss whether a review or a separate appraisal fits the situation; acceptance and scope depend on the assignment.
About Irvine Appraising Company
Irvine Appraising Company provides residential appraisal services in Salt Lake, Utah, Davis and Tooele counties. Troy W. Thompson is a Utah Certified Residential appraiser with more than 20 years of residential appraisal experience. Contact the company to discuss a property and the appraisal question you need to resolve.