Dos and Don’ts of Appraisal Reconsideration of Value Requests
What is a Reconsideration of Value?
A Reconsideration of Value (ROV) is a request for an appraiser to review their appraisal due to missing or incorrect information. Borrowers can use this process to highlight errors or omissions in their property appraisal to their lender.
In this blog, we’ll look into the dos and don’ts of ROV responses, providing actionable tips to help you navigate the process with confidence.
Dos of Reconsideration of Value Appraisal Requests
1. Do ensure confidentiality when handling ROV requests
Before responding to any reconsideration of value, verify that the request has been forwarded by your client or a party designated by the client, such as an AMC or an agent.
According to USPAP, appraisers are prohibited from discussing appraisal results with anyone other than the client or their designated representatives.
Avoid responding to any appraisal reconsideration of value requests sent directly by real estate agents, borrowers, sellers, or other unauthorized parties.
2. Do start with a positive
While responding to an ROV appraisal request may be inconvenient, begin on a positive note by acknowledging the effort taken to file the complaint. You could say:
“I understand that this situation can be frustrating, and I’m here to provide a thorough review of the points you’ve mentioned.”
“I recognize how important this process is for you, and I appreciate the opportunity to revisit my assessment in response to your request.”
“I’m responding to your concern regarding…”
As difficult as it may be, especially when you feel the complaint wasn’t justified, you should always respond in a sincere and respectful manner.
3. Do be thorough in all responses
Start by quoting the search criteria you used in your original ROV appraisal. Then, address each submitted sale individually. Remember that at this point, they’re just sales—not yet comparable—until you’ve thoroughly analyzed them.
- If one or more of the submitted sales aren’t competitive with the property you’re appraising, explain your reasoning clearly. Show how the sale doesn’t fit your search criteria and ensure your explanation is professional, as the borrower will likely read it.
- If one or more of the submitted sales should be considered comparable but were left out of your original report, explain why. For example, it could’ve been mislabelled in the MLS. These sales should be added to the sales grid and adjusted accordingly.
Don’ts of Reconsideration of Value Requests
1. Don’t dismiss presented information without reason
Offer specific reasons for why each sale isn’t comparable to the subject property. For example, if the appraisal ROV includes a sale that differs in age or type, explain: “The property at 789 Oak Street wasn’t considered a suitable comparable as it is 15 years newer and features modern construction materials, while the subject property at 123 Maple Avenue is a mid-century home with original fixtures.”
2. Don’t avoid admitting potential errors or omissions in your appraisal
If an adjustment is required in the appraisal report, acknowledge the mistake and make the necessary revisions. Even seasoned appraisers can occasionally make errors. Regardless of whether the error impacts the property valuation positively, negatively, or not at all, it’s important to address and correct it.
When revising the appraisal, summarize the changes made and update the report date to comply with USPAP. Even if no changes are made to the appraisal, it’s advisable to update the date and include a summary of the ROV appraisal request along with your response. The goal is to always deliver the most accurate and reliable appraisal to the client.
3. Don’t set unrealistic deadlines for responding to ROVs
If you can’t meet a deadline, communicate this to the client promptly and explain the reasons. While it’s important to try to meet deadlines, especially if the client has a tight schedule, prioritizing accuracy and thoroughness is essential.
Avoid rushing through the appraisal ROV to meet a deadline, as this could lead to errors or omissions.
Conclusion
Effectively managing Reconsideration of Value appraisal requests requires a blend of thoroughness, professionalism, and transparency.
By assessing concerns, responding positively, and providing detailed explanations, appraisers can address borrower issues while preserving credibility.
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