The real estate market has been moving at a breathtaking pace this year, and we’ve been seeing more home appraisal Reconsideration of Value (ROV) requests. That’s not unique to Kairos; many AMCs are seeing a substantial uptick in ROV requests.
This is due to several interesting factors that are happening the market right now. While nobody wants to have to do an ROV, at Kairos, it’s really important for us to make sure that we look at every single request that comes our way, and we have a unique approach for handling these requests.
More on that a little later, but first, let’s look at what’s happening in the market that’s causing these appraisal ROV requests.
How the Market is Affecting Appraisals
2020 changed our daily lives in a number of ways. We’ve made adjustments to how or where we work, how our kids go to school, and much more. Which has also caused many of us to shift the ways we think about our future. This impacted the real estate market quite significantly — people purchased fewer properties during the first few months of the pandemic. Plus, every state had different restrictions about home transactions, which also caused things to slow for a bit.
Fewer transactions earlier this year mean that there are fewer good comparable houses for appraisers to use when they do an appraisal report. Even if a home is worth more now, the appraisers must use the numbers available to them from recently closed comps.
Appraisal waives are a factor in this, too. More appraisal waivers mean that there is less data to use when it’s time to decide on a home’s value.
Now that we’re ten months into this pandemic, the housing market has rebounded rapidly. This also means the prices of homes have been rising quicker than appraisals are being done. This can mean that a home price is artificially low when it’s appraised. Plus, with inventory so low, people get in bidding wars and are willing to pay above-market value. However, that causes problems when it’s appraisal time.
How to Submit a Reconsideration of Value Request
If you need to submit an ROV request, here’s some information on our website about how to do it.
Acceptable documentation includes:
- Full MLS printouts of no more than three recent, similar comps from the market area
- A legible copy of a different appraisal on the subject property. Including color photos and comps from the past four months
- A list of significant errors in the original appraisal report regarding either the subject property or comps
Unacceptable documentation includes:
- Inclusion of personal property (i.e. an above-ground pool)
- Sales that require excess location, quality, appeal, or condition adjustments
- Listings or assessor data
- Lists of sales with limited information like realtor market surveys
- SiteX or other non-verifiable data
- Any other item that does not contain enough detail to determine the validity of a likely comp
How Kairos Handles Appraisal Reconsideration of Value Requests
What’s happening in the market has meant that we’ve received more ROVs from lenders who feel that a property hasn’t been appraised correctly.
Of course, the appraiser has already completed a good report, and nobody is going to be paid more if an ROV is done. With some AMCs, this can make it hard to get a thorough ROV. At Kairos, we don’t care about that—we want to make sure that our clients get the most accurate, complete appraisal possible, and we don’t charge more for it.
We have a person in our office who personally goes through every single ROV request, researches any additional possible comps that may help us bracket differently and get a higher value on the property if that value is warranted. Then, our chief appraiser reviews each file before submitting it to the appraiser. Finally, we work with the appraiser to get the report changed, if necessary.
Why We Go the Extra Mile on ROV Requests
Of course, this kind of painstaking work takes time. But, we believe that it’s worth going the extra mile to make sure that the appraisal is as accurate as possible. Most importantly, everyone involved in the transaction is satisfied with our work.
We’re more than happy to put in the additional time and effort to give you the best customer service possible. If you have any questions about the Appraisal Reconsideration of Value process, please go here to speak with our Kairos Appraisal team.