What Is a Reconsideration of Value for an Appraisal Report?

The cooling housing market is forecast to continue in 2023, and buyers and sellers are proceeding with caution. With increased interest rates and declining home sales, there’s plenty to be nervous about—and there’s still the home appraisal, which can derail any mortgage deal if it comes in “low.” The good news is that a reconsideration of value (ROV) might get the loan back on track, when approached properly. 

In October 2022, the Consumer Finance Protection Bureau reminded buyers and sellers that they can ask lenders to reconsider a home appraisal valuation if they believe the initial appraisal report was inaccurate due to errors, inadequate comparable properties, or other considerations.

Read on to learn how an appraised value that’s too low can affect a home sale and how a reconsideration of value can make it right for all parties involved—and possibly put the deal back on the closing table.


Let’s say a seller accepts the buyer’s offer to purchase the home for $300,000, and the maximum loan-to-value ratio for the buyer’s mortgage loan is 97%, or $291,000. If the home appraises for only $281,000, the buyer is left with these options:

  • Pay the $10,000 difference out of pocket.
  • Negotiate with the seller to lower the purchase price.
  • Terminate the purchase contract and get their earnest money back, assuming they have an appraisal contingency. If not, they risk losing their deposit.
  • Request a reconsideration of value.

If the buyer’s lender requests an ROV and the reconsidered appraised value meets their LTV, then the lender would likely approve their mortgage and the home sale can proceed as planned.


In the scenario above, the seller can agree to reduce the price. If they do not lower the price and the sale falls through, they will have to put their home back on the market.

Let’s say a seller believes the appraisal report conducted on the home they’re selling is inaccurate. Perhaps they noticed inaccuracies on the report or that certain value-adding factors were overlooked.

The seller can work with their real estate agent to submit additional information supporting the higher value to the buyer’s lender. The buyer’s lender can then submit a reconsideration of value request. If the reconsideration of value results in a higher home valuation, then the sale can proceed at the agreed-upon price.

Loan Officers

When a loan officer has a realistic value expectation, they can better manage borrower expectations. It’s always better to structure a deal when you have an accurate home value upfront than to restructure it after the appraisal comes in. 

If the appraisal report comes back with a lower value on the subject property than expected, the loan officer can confidently advise their client to submit an ROV request. They can use the comparable sales from the original value expectation to plead their case. 

Pocket Comps Tool

It’s best for all parties involved to have an accurate home value expectation from the beginning. This is how Kairos’ Pocket Comps Tool can help. Accessible on our Pocket Appraisal platform, this tool determines an expected property value in less than five minutes and is based on real comparable properties, or recent sales of similar homes. This is similar to the process appraisers use to determine value.

Unlike sites like Zillow that offer approximate values, Pocket Comps does not use an algorithm. Instead, it provides a list of comparable properties, sorts them with similarity scores, and lets you and your client choose the best. The value you get is based on local knowledge and can serve as a benchmark against the official appraisal report. If there is a discrepancy, then a reconsideration of value may be warranted.

Kairos Implements VA Tidewater Initiative on All Purchase Transactions

As a safeguard for appraisers and for the protection of our customers, Kairos Appraisal Services is implementing the VA Tidewater Initiative for all purchase transactions.

The VA Tidewater Initiative states that if the opinion of value is less than the contract price, the appraiser is required to contact the designated point of contact (POC) as specified in the appraisal order form to request additional comparable and market data to support the value.

If additional information is submitted, then the appraiser must consider this data and either amend the appraisal report or state the details of the information provided and explain why this information does not result in an alteration to the opinion of value.

If additional information is not provided, then the appraiser must disclose the efforts made by the appraiser to obtain the information and the subsequent results.

In a changing market, the team at Kairos Appraisal Services wants to ensure that the ROV process does not become the new normal on every transaction. By implementing the Tidewater Initiative on all purchase transactions, Kairos is reducing the need for ROVs by providing the highest quality and most accurate appraisal valuation the first time.

Not only does this save money, time, and hassle, but it can also save the deal for the loan officer, real estate agent, buyers, and sellers.

Kairos’ Reconsideration of Value Process

In the event that an ROV is needed, Kairos Appraisal is here to assist and has a high success rate with this process (industry average for successful ROVs is less than 5%). Many AMCs don’t want to spend time on the process, especially since they don’t get paid for an ROV. At Kairos, we’re always eager to go the extra mile to get our clients the most accurate, complete appraisal report possible.

Unlike other AMCs, Kairos has a dedicated team to handle reconsideration of value requests. Our team is involved with the most important pieces of the ROV: reviewing the data, determining viability, and presenting the information. 

Our chief appraiser completes a final review of each reconsideration of value before our team ever approaches the appraiser. After all data points have been thoroughly analyzed, we present the information to the appraiser in an unbiased manner and ensure that all parties involved are properly represented.

You can learn more about submitting reconsideration of value requests on our website’s Reconsideration of Value section. If you have any questions about our process, click here to connect with a Kairos team member.

Alex Todak