Low appraisals are making it difficult for people to reap the benefits of historically low mortgage rates through buying a home or refinancing an existing mortgage. The National Association of Realtors reports that 33 percent of agents responding to an April poll said that transactions had been canceled, delayed, or renegotiated due to low appraisals. Some experts attribute lower appraisals to the fact that home values have fallen more than expected, while others are critical of appraisers using distressed sales as comparables. Moreover, regulations to prevent undue pressure on appraisers have made valuations more conservative and spurred the use of appraisers who lack local market knowledge. To improve their chances of getting financed, borrowers should obtain comparables from the past three to six months; offer the comparables to appraisers; accompany appraisers on the inspection; resubmit mortgage applications with a different lender; and even ask lenders to review the appraisal. However, for the latter strategy to work, borrowers will have to provide comparable sales data not taken into account by the appraiser, as lenders stress that there needs to be a reason for a second appraisal aside from the fact that the borrowers simply are not satisfied with the initial valuation. | Read More