Q: The appraisal just came back low on the home I am selling. My real estate agent said only the buyer can contest. Why?
I responded by telling her it was my understanding I could challenge the buyer's appraisal by having my agent call the lender. My agent agreed to make the call. However, I'm concerned as to why my agent was untruthful with me about my right to contest. The home is under contract, but I'm concerned my realtor is not acting in my best interests. Any advice?
A:
Thanks for your post.
Federal law requires that lenders give a copy of the appraisal to the BORROWER for residential loans. This is an expansion and relatively recent change in the law - historically lenders didn't give copies of the appraisal to anyone, including the buyer/borrower, even though the buyer paid for it.
It is unlikely that a lender will talk to the seller (or their agent) -- the lender engages whomever they wish to appraise a property to be used as collateral and relies on the appraisal to make a business decision. A lender won't really care if a seller feels the appraised value is too low. It may be possible, though unlikely, that the appraiser had incorrect facts that could be challenged and possibly the buyer might be willing to challenge. However, most of the time if a contract is contingent on appraisal and the appraisal comes in low, the seller will need to decide whether they wish to re-negotiate the price or attempt to re-list the property. Or perhaps a seller convinced of the value and able to do so might offer seller financing.
It is unclear where you are getting your information. Perhaps you might share the reference to whatever law you believe grants you the rights you reference.
While not legal advice, I hope this general information helps.
A: I think the agent is trying to keep you focused on the objective, which is selling the house to the buyer. Your agent's call to the other side's lender is unlikely to be interesting to the lender. Of course, you and your agent want the appraisal to be higher, but neither of you will have any credibility with the buyer's lender, and you have no relationship with that lender. Your discussion is with your buyer. You might want to convince them that you aren't going to sell it for the appraised price, and, if they want it, they will buy it for the agreed price. Their discussion is with their lender. They might want to use the data you will provide to persuade the appraiser or the bank to change their position. But, the lender is unlikely to be interested in your self-interested telephone call.
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