Reconsideration Of Value
Coastal Loans, LLC (CL) is committed to providing applicants with an easy method for raising concerns about property appraisals performed during the application process.
Should you have concerns with your appraisal, please review the information below and submit these concerns as outlined. It is important to let us know about your concerns as early as possible so they can be addressed quickly.
What is an Appraisal?
An appraisal is a professional opinion of a property’s market value, completed by a licensed real estate appraiser. This impartial assessment helps lenders ensure the property being used as collateral for a loan has sufficient value to support the loan amount. Appraisers follow strict guidelines under the Uniform Standards of Professional Appraisal Practice (USPAP), which require them to compare the property to similar recently sold properties in the area to determine a fair and accurate value.
What is a Reconsideration of Value (ROV)?
A Reconsideration of Value (ROV) is a request made by an applicant for the appraiser to reevaluate the analysis and conclusions of the initial appraisal. The applicant will provide additional information, data, and comparable that the applicant believes will impact the value conclusion. Note: a max of 5 comparables can be provided. Information on how to complete and submit an ROV is included below. Only one ROV request is permitted per loan file.
Concerns about Appraisal Bias or Discrimination
Appraisal bias and discrimination are serious concerns in the property valuation process. It is both illegal and unethical for appraisers to consider factors such as race, color, religion, national origin, sex, marital status, age, disability, receipt of public assistance, or military status when determining a property’s value. Bias in appraisals can lead to properties being inaccurately valued, impacting homeowners and communities. Ensuring fair, unbiased appraisals is essential to responsible lending and helps promote equitable access to homeownership.
Instructions for Requesting an ROV
Please be as detailed as possible in providing information for the appraiser to consider. For factual errors, please provide which data points are inaccurate (number of bedrooms, number of bathrooms, gross living area (GLA) errors, age of home errors, presence or absence of a fireplace, parking garage, swimming pool, etc.).
- Complete the ROV Request Form on your own or consult with your real estate agent for input on relevant comparables or information that may be beneficial to include with your request. Even if your real estate agent does not believe that submitting an ROV Request will result in a change in the value conclusion, you are still entitled to do so.
- You must complete and sign the ROV Request Form and return to rov@coastalloans.net. The form must be returned to CL to take action.
- The form will be reviewed by the Company’s Collateral Desk to ensure it is completed correctly, provides sufficient information for the appraiser to consider, and does not contain prohibited information.
- Provided the form is acceptable, the Company’s Collateral Desk will submit the ROV request to the appraiser.
- The appraiser will consider the ROV request and may agree or disagree that an adjustment or correction to the report is appropriate. The appraiser is an independent valuation professional who will determine whether or not the appraisal report warrants a change and cannot be directed by you or CL to change the appraisal.
- The Company’s Collateral Desk will inform you of the ROV results. The ROV process generally takes 7 business days.
General Guidance on Comparable Selections
Comparable sales often play a significant role in determining the fair market value. The appraiser is responsible for determining which comparables are the best and most appropriate for the assignment based upon a variety of factors. Here are a few general guidelines they must consider that should guide you in this Reconsideration of Value process:
- Comparable sales should represent recent sales in the market that have closed (cannot be a listing or contingent sale) within the last 6 to 12 months before the completion of the appraisal report.
- Comparable sales should be near the subject property, and ideally located in the same neighborhood. If there are not enough recent comparable sales in the same neighborhood, the appraiser may select comparables from other nearby neighborhoods.
- Comparable sales should have similar physical characteristics (e.g. similar room count, gross living area (GLA), style (e.g. ranch, split level), and condition). This does not mean the comparable must be identical to the subject property, rather it should appeal to the same buyers.
Please provide specific addresses of comparable sales you think the appraiser should have selected (or not selected) and why. If you are working with a real estate agent, they may be able to help you find comparable sales in the area. You may use websites like Redfin® and Zillow® or public records to find recent sales activity – but keep in mind, you cannot use current listings.
Appraiser Independence Requirements
The Appraiser Independence Requirements prohibit anyone from influencing or trying to influence an appraiser’s value conclusion through coercion, collusion, compensation or intimidation. To avoid any appearance of influence please:
- Do not give your value conclusion or mention the final market value or range of values you desire;
- Please do not provide a prior appraisal report; however, you may include comparables from that report should they still be timely;
- Please be respectful in providing your narrative about your concerns with the appraisal;
We may ask you to resubmit the ROV Request Form if these guidelines are not followed.
