If an appraisal raises a question, finding a higher-priced sale is not enough to explain the concern. A useful reconsideration of value, or ROV, identifies a specific issue and supplies information that helps someone evaluate it.
Alternative sales can be part of that information. Their usefulness depends on how they relate to the property and the appraisal, not simply on the price they achieved.
Begin with the lender’s process
Ask the lender how to submit a request, what information to include and which limits apply. Follow that process before sending a collection of links or contacting the appraiser independently.
For loans subject to Fannie Mae’s requirements, its borrower-initiated ROV framework calls for identifying the concern, supplying supporting information and explaining why it matters. It limits the additional comparable properties to five. Other programs and lenders may have different requirements. [1]
Read the report before choosing sales
Identify what the report already considered. A sale that appears absent from the comparison grid might be discussed elsewhere. The report may also explain why a nearby property was less useful than a more distant one.
Write down the issue as specifically as possible. For example, you might question a reported property feature or ask whether a particular sale provides relevant evidence about the subject’s condition. Keep a factual correction separate from a request to consider another property.
Explain the connection
For each proposed sale, describe what makes it relevant. Consider the location, property type, size, site, condition, date and other features that affect comparison. A similar address or appearance alone may not establish that the properties compete for the same buyers.
Fannie Mae’s comparable-sales guidance focuses on appropriate comparisons and the explanation of meaningful differences. [2] A submission is easier to evaluate when it acknowledges differences instead of presenting every proposed sale as an exact match.
If information is incomplete, label it as incomplete. Do not fill gaps with assumptions about a property’s interior, condition or terms of sale.
Put the information in a short, usable format
For each proposed property, include:
The address and a traceable source, such as a listing identifier.
The reported sale date and price, with the source for those details.
The characteristics that make it relevant to the subject.
Important differences you know about.
A brief explanation of the question it helps address.
Ask the lender how the appraisal’s effective date should be handled when selecting information. That date identifies the point in time the valuation addresses; a sale needs to be considered in that context.
Request consideration, not a result
“Please consider this sale because it appears to have similar acreage and condition” gives the reviewer a question to examine. “Use this sale to reach the purchase price” asks for a predetermined outcome.
A focused request can lead to an explanation, a correction or a change in the analysis. It does not guarantee a different value. If your concern involves possible discrimination, tell the lender explicitly and use its process for that concern rather than trying to express it only through a list of sales.
Sources: 1. Fannie Mae Selling Guide: Appraisal Quality Matters, Reconsideration of Value. 2. Fannie Mae Selling Guide: Comparable Sales.
General educational information. Follow your lender’s current instructions and the requirements applicable to your loan.
