Why Do Buyers Sometimes Request a Second Appraisal?

A second appraisal is not simply a do-over because the first value was disappointing. Start by understanding why the valuation is being questioned.

First: The Buyer Usually Does Not Control the Appraisal

In a financed purchase, the lender generally orders and manages the appraisal process.

That distinction matters.

The Buyer may pay the appraisal fee,

but that does not normally mean the Buyer can simply hire another appraiser and substitute a new value into the mortgage file.

If the Buyer disagrees with the appraisal, the Buyer should start with:

the lender's valuation-review process.

1. Start by Identifying Why the First Appraisal Is Being Questioned

There is a major difference between:

“We don't like the value.”

and:

“We believe there is a specific problem with the valuation.”

Possible concerns may include:

• Incorrect square footage or property information.
• Incorrect bedroom or bathroom count.
• A major renovation or property feature not properly reflected.
• Comparable sales that appear materially less relevant than available alternatives.
• Relevant recent sales that were not considered.
• Material location or condition adjustments that appear unsupported.
• Other factual or analytical deficiencies.

A different opinion alone does not prove that the original appraisal is wrong.

2. Reconsideration of Value May Come Before a Second Appraisal

For many mortgage transactions, the appropriate first step may be a:

Reconsideration of Value, or ROV.

A Reconsideration of Value allows a borrower to ask the lender to review concerns about the appraisal.

Depending on the situation, supporting information could include:

• Factual corrections.
• More relevant comparable sales.
• Information about renovations or features.
• Market information that may not have been adequately considered.
• Specific concerns about how the appraisal was developed.

The lender then follows its review process.

For loans requiring an appraisal under Fannie Mae requirements, lenders must maintain a borrower-initiated ROV process for situations in which the borrower believes the value is unsupported, the appraisal may contain unacceptable appraisal practices, or prohibited discriminatory practices may have affected the valuation.

3. Better Comparable Sales Can Matter—but They Need to Be Truly Comparable

One of the most common appraisal challenges involves comparable sales.

A Buyer or agent may find another sale with a higher price and think:

“Why didn't the appraiser use this one?”

But a higher-priced sale is not automatically a better comp.

Consider:

• Distance.
• Sale date.
• Subdivision or micro-location.
• Square footage.
• Lot.
• Condition.
• Renovation level.
• Property style.
• Basement.
• Garage.
• Other meaningful property differences.

The goal is not to find:

the highest sale.

The goal is to identify:

a more relevant piece of market evidence.

4. A Renovation Does Not Automatically Add Dollar-for-Dollar Appraised Value

Buyer or Seller may say:

“They spent $100,000 renovating the home.”

That is useful property information.

But appraisal value is not calculated by simply adding renovation receipts to the prior home value.

The appraiser considers how the market recognizes:

• Condition.
• Quality.
• Features.
• Functional improvements.
• Relevant comparable properties.

A renovation can affect market value without producing a dollar-for-dollar return.

5. Sometimes the Lender May Ask for a Revised Appraisal

If the lender identifies a factual issue or another deficiency, the lender may ask the original appraiser to revise or clarify the report.

That is different from ordering an entirely new appraisal.

For example, the lender may need clarification regarding:

• Property data.
• Comparable selection.
• Adjustments.
• Market-condition analysis.
• Unsupported conclusions.

6. The Lender May Use an Appraisal Review Instead

Depending on the loan and lender requirements, a lender may use:

• A desk review.
• A field review.
• Additional collateral-review tools.

The purpose is to determine whether the original appraisal is reliable and adequately supported.

A review can sometimes produce a different opinion or identify problems that require further action.

Again:

the lender controls what valuation evidence is acceptable for underwriting.

7. When Might a New Appraisal Actually Be Ordered?

A new appraisal may be appropriate in certain circumstances.

For example, under Fannie Mae guidance, a lender that remains unable to resolve material appraisal concerns through the original report or review may obtain another appraisal.

But the lender should have a documented reason.

The purpose should not be:

“Let's keep ordering appraisals until one gives us the contract price.”

Fannie Mae specifically requires lenders obtaining a new appraisal because of deficiencies to select the:

most reliable appraisal—not simply the appraisal reporting the highest value.

The Appraisal Challenge Path

8. What If the Second Appraisal Comes in Higher?

A higher second appraisal does not automatically mean:

the lender must use the higher value.

The lender must determine which valuation is acceptable under the applicable loan program and underwriting rules.

Where multiple valuations exist, the lender may need to determine:

• Why the reports differ.
• Whether the original appraisal had material deficiencies.
• Which report is better supported.
• Which report satisfies investor or loan-program requirements.

9. What If the Second Appraisal Comes in Lower?

That is also possible.

A second valuation is independent evidence.

It is not guaranteed to confirm the contract price or produce a value higher than the first appraisal.

If a second valuation is lower, the lender will follow the applicable underwriting and loan-program requirements.

The parties may then need to revisit:

• The Buyer's available cash.
• The loan amount.
• Applicable appraisal or financing rights.
• Possible price negotiation.
• Other contractual options.

10. Conventional, FHA, and VA Loans May Follow Different Rules

Do not assume every loan program handles appraisal disputes the same way.

Conventional / Fannie Mae-Type Financing

Lenders must maintain appraisal-review procedures, including borrower-initiated ROV processes where applicable.

The lender may also use revised appraisal work, desk or field review, or—in justified circumstances—a new appraisal.

FHA Financing

FHA appraisal rules contain program-specific restrictions regarding when a second appraisal may be ordered.

A second appraisal generally should not be treated as a way to shop for a higher value simply because the first appraisal does not support the purchase price.

Certain circumstances—such as specific appraisal deficiencies, appraisal validity issues, appraisal portability situations, or program-specific requirements—can affect what is permitted.

VA Financing

VA specifically provides a Reconsideration of Value process.

If a VA appraisal is lower than expected, the Buyer may work through the lender and provide relevant sales information supporting a request for reconsideration.

VA also identifies other possible responses to an insufficient value, such as renegotiating price or—in appropriate circumstances—bringing additional cash.

11. A Low Appraisal Does Not Automatically Change the Contract Price

This distinction matters.

Suppose the parties agree to:

$700,000.

The appraisal comes in at:

$675,000.

That does not automatically rewrite the purchase price to $675,000.

The next step depends on:

• The actual contract.
• The financing terms.
• Any appraisal provisions.
• The Buyer's available cash.
• The Seller's willingness to negotiate.
• The lender's valuation decision.

12. Timing Matters

A valuation dispute can take time.

The transaction may still have:

• A contractual closing date.
• Financing deadlines.
• Rate-lock deadlines.
• Seller moving plans.
• Buyer moving plans.
• Another purchase or sale connected to the transaction.

So if the appraisal creates a problem:

address it early.

Do not wait until the day before closing to begin deciding whether the valuation should be challenged.

13. The Real Estate Agent's Role Is Evidence—not Pressure

A real estate agent may be able to help identify:

• Relevant comparable sales.
• Property improvements.
• MLS data.
• Micro-location differences.
• Other factual information useful to the lender's review.

But the agent should not pressure an appraiser to:

“hit the contract price.”

The purpose of providing information is to improve the quality and completeness of the valuation process—not to dictate the result.

What Should You Check Before Requesting an Appraisal Review?

Frequently Asked Questions

Final Thoughts: Challenge the Evidence, Not Just the Number

When an appraisal comes in lower than expected, emotions can rise quickly.

The Buyer may worry about financing.

The Seller may believe the property is being undervalued.

The agents may know of sales that appear to support a different conclusion.

But the strongest response is not:

“We need another appraisal because we don't like this one.”

Instead, ask:

Are the property facts correct?
Are the comps appropriate?
Was relevant information overlooked?
Are the adjustments reasonably supported?
What evidence supports a different conclusion?
What review process does the lender allow?
And what does the purchase contract allow if the valuation problem remains?

Sometimes the result will be a corrected appraisal.

Sometimes an ROV.

Sometimes a desk or field review.

Sometimes a new appraisal may be justified.

And sometimes the original appraisal remains unchanged.

Keller Williams Realty Atlanta Partners · (404) 375-2120

This article and accompanying video are provided for general real estate education and information only and do not constitute legal, lending, appraisal, financial, underwriting, tax, contract-interpretation or other professional advice. Mortgage appraisal requirements vary by lender, loan program, investor, property type and transaction circumstances. A Buyer generally does not have unilateral authority to replace a lender-ordered appraisal simply because the appraised value is lower than expected. Reconsideration of Value procedures, appraisal corrections, revised appraisal reports, desk reviews, field reviews and additional appraisals are controlled by applicable lender and loan-program requirements. An ROV does not guarantee that appraised value will increase. A second appraisal does not guarantee a different or higher value, and a lender may not simply use the highest valuation without regard to reliability and applicable underwriting requirements. Comparable sales should be evaluated for relevance rather than selected solely because they have higher sale prices. Renovation expenditures do not automatically produce equivalent increases in market value. Contract price, listing price and appraised value are different concepts. A low appraisal does not automatically amend the purchase price, create a Seller obligation to reduce price, or give a Buyer a right to terminate unless the applicable contract and financing provisions provide such rights. Conventional, FHA, VA, USDA, jumbo and portfolio loan appraisal requirements can differ. VA provides a formal Reconsideration of Value process, while FHA has its own program-specific appraisal and second-appraisal requirements. Mortgage lenders and appraisers must also comply with appraisal-independence and fair-lending requirements. Real estate professionals may provide relevant market data, comparable sales and property information but should not improperly influence an appraiser's independent valuation. Buyers and Sellers should consult the lender regarding valuation procedures and qualified legal counsel regarding disputed contract rights or obligations. Equal Housing Opportunity. Tina Jingru Sui, GA License #392936, REALTOR®, affiliated with Keller Williams Realty Atlanta Partners.