Q&A: Appraisal Disappointment

Q. I want to re-finance my house and the appraisal came back significantly lower than I had expected. My broker says I can’t refinance now because of the low appraisal. How can I get another appraisal from another bank?

A: Sometimes when you answer literally the question which has been asked, you miss providing the information the person is really seeking. I will try to address both what you asked and what I think you are trying to get to.

Can you get an appraisal from another bank? The simple answer is “yes, you can.” By applying for a re-finance at another institution they will require you to pay another appraisal fee and they will also order an appraisal.

I am going to go out on a limb and assume that you mean by “the appraisal came in low” that it came back for less than the amount you had hoped for in order to cover expenses and make it worthwhile for you.

If your real goal is to find out what the value of your home is, there are several recommendations I would make which could accomplish that:

1. Find an independent appraiser and pay for an appraisal of the home, on your own—without an order from a bank
2. Select one or two competent, experienced real estate agents in your area and request a Complimentary CMA (Comparative Market Analysis) or BPO (Broker Price Opinion). Agents are usually happy to do this since they hope you will give them a listing later or at least a referral to someone else
3. Check the tax records on your home to see what valuation is used by the local Tax Assessor

Our current financial crisis was caused, in large part, by inflated appraisals; many of those were associated with re-finances. Lenders across the country are now being ultra-conservative and you are not likely to find anyone who is willing to refinance unless you have equity in the home which can be clearly demonstrated with an appraisal. Marginal values are not going to cut it.

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