CV Escrow | How To Use a Rebuttal Letter to Contest a Lowball Appraisal
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How To Use a Rebuttal Letter to Contest a Lowball Appraisal

How To Use a Rebuttal Letter to Contest a Lowball Appraisal

iStock_000012157882XSmallNo party involved wants to reach the appraisal process only to watch the entire deal crumble. In the case of a sale that risks falling apart after a lower-than-expected appraisal, a rebuttal letter may come to the rescue – if executed correctly.

Several sources cited in a recent Wall Street Journal article gave inside advice for how to submit what is also called a “reconsideration letter.” Though this formal letter offers only a slim chance for an adjusted appraisal to hoist the sale back on track, a number of agents have found success using this technique. In the best case scenarios, a new appraisal gives the borrower another chance to qualify at the desired loan amount instead of scrambling to deliver a higher down payment.

Select tips from the WSJ piece include:

  • The borrower or loan originator prepares the rebuttal letter for the commissioning lender, with input from the agent and/or an appraiser
  • Rely on facts (not emotions): offer data, exhibits and professional opinions
  • If possible, prove factual errors, flawed methodology or that appraiser lacked market familiarity/experience
  • State your intention to report appraiser to licensing board if flaws aren’t promptly corrected
  • Letter should be bound professionally and distributed to all parties

To avoid a dangerously low appraisal, ensure the appraiser is highly experienced in the area and with the type of home, especially when selling a luxury property.

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