Every real estate agent dreads the phone call: the appraisal came in below the contract price. Deals stall, buyers panic, and sellers get defensive. But a low appraisal doesn't always mean the deal is dead.
Agents have the right to challenge the appraisal through a formal Reconsideration of Value (ROV). However, most ROVs fail because agents approach them incorrectly—submitting emotional pleas or irrelevant data rather than focusing on hard appraisal methodology. Here is how top-producing Realtors successfully navigate an ROV.
1. Don't Complain—Provide Better Data
Appraisers are bound by strict guidelines (like USPAP and Fannie Mae regulations). They cannot change a value simply because it kills a deal. The only way an appraiser can revise a value is if they are presented with better, more relevant comparable sales that they missed or excluded.
2. How to Select the Right "Comps" for the ROV
When selecting comps to submit in your ROV, they must be mathematically superior to the ones the appraiser originally used. Use this checklist:
- Proximity: Are your comps closer to the subject property than the appraiser's? (In suburban areas like Westchester, try to stay within 1 mile).
- Date of Sale: Did your comps close more recently? An ideal comp closed within the last 90 days.
- Size & Utility: Are the Gross Living Area (GLA) and room counts more similar? Don't compare a 2,000 sq ft home to a 3,500 sq ft home just because the price supports your deal.
- Style: Compare Colonials to Colonials, and Ranches to Ranches.
3. Check for Factual Errors in the Report
Appraisers are human and mistakes happen. Carefully review the sketch and the grid. Did the appraiser miss a full bath? Did they miscalculate the square footage? Did they incorrectly categorize a walk-out finished basement as above-grade living area? (Note: Fannie Mae ANSI standards dictate how this is measured). Factual errors are the fastest route to a revised appraisal.
4. Format Your ROV Professionally
Submit your ROV through the lender (who will pass it to the AMC and then the appraiser). Keep it objective and grid-focused:
"We respectfully request a Reconsideration of Value based on the following three closed sales, which are located closer to the subject property and share the identical architectural style. Please see MLS #12345, which closed 30 days ago and is located within the same subdivision."
When to Advise a Pre-Listing Appraisal
To avoid the ROV headache altogether, consider advising your sellers to invest in a pre-listing appraisal. For unique properties, homes with unpermitted additions, or highly customized luxury estates in Westchester, a pre-listing appraisal establishes an objective baseline and prevents nasty surprises when the buyer's bank appraiser shows up.