Appraisal Reconsideration of Value (ROV)
Are you purchasing a home, selling a home, refinancing an existing home loan? The appraisal process of real estate properties is likely a step in that application process.
OakStar is committed to giving customers a convenient method to raise concerns about appraisals performed during the loan process.
OakStar wants to ensure customer have a method to point out possible:
- Errors or omissions in the appraisal report
- Use of incorrect comparable properties
- Evidence that the appraisal was influences by bias or discrimination
If you are finding an issue like what is stated above, please review the information below and how to submit your concerns. OakStar urges you to raise your concerns as early as possible in the process so they can be addressed in a timely manner.
OakStar is committed to ensuring the appraisal process is accurate, fair and free from discrimination and/or bias. We are currently taking steps to make sure the appraisal is factually accurate before it is sent to you. However, you should take the time to review the appraisal report and submit the ROV form to your lender or banker if you have questions or concerns about the appraisal process or the reliability or credibility of the appraisal.
What is an Appraisal?
An appraisal is ordered to help your lender in making a loan decision. If an appraisal is conducted, you will be provided with a copy of that appraisal report in accordance with regulatory requirements.
What is a Reconsideration of Value (ROV)?
An ROV is a path for a customer to request an appraiser to reassess their appraisal using different information that could impact their valuation conclusion. OakStar has created this simple form to complete. We ask that you include information, data, comparable sales, or evidence of bias or discrimination that you believe could impact the value conclusion.
What constitutes Bias or Discrimination?
Appraisers should not conclude property values influenced based on characteristics like race, color, religion, national origin, gender, marital status, age, receipt of public assistance income, or handicap. Examples that might indicate there is bias or discrimination:
- Receiving a value that is lower than the contract purchase price
- Outward verbal comments by the appraiser that are biased or discriminatory
- An appraisal that references race or ethnicity in the “Neighborhood Description” or anywhere in the appraisal
- An appraisal that references languages spoken in the area
- An appraisal that references amenities that are geared toward a race, ethnic or religious group, such as the property is near a shopping center that has certain ethnic food and clothing stores
- Comments that housing prices in the area are rising due to gentrification
- An appraisal that refences the diversity or lack of diversity in the area
Clear explanation in your ROV form will assist in the process.
Examples of Errors or Omissions that might trigger a ROV
- Incorrect number of total rooms, bedrooms, bathrooms, or garage specs
- Incorrect square footage of the entire site, gross living area, or specific rooms
- Incorrect age of the home
- Incorrect quality of construction ratings
- Incorrect property condition ratings
Omissions
- Excluding features of the home such as fireplace, swimming pool, patio or deck
- Excluding description of any deferred maintenance, recent remodeling or upgrades
- Excluding recent sales history and prior purchase price of the home
Please include as much information as possible for the appraiser to consider. Providing as much evidence and details of the errors and/or omissions will assist in a quick resolution.
What should you provide for comparable properties?
Comparable sales should be recent sales of properties that are similar to the subject property. The appraiser should be selecting the best and most appropriate comparable property sales which should be based on a multitude of factors. Here are some examples of some general factors that appraisers should be following in selecting the comparable sales:
- Sales should be no older than 12 months before the completion of the appraisal
- Sales should be in close proximity to the subject property, ideally in the same neighborhood. If there are not enough recent sales in the same neighborhood, you may select from nearby neighborhoods.
- Sales should share similar physical characteristics to the subject property. This would include number of bedrooms and bathrooms, square footage, style, and condition. This does not mean the comparable must be identical just similar.
When providing the comparable sales on the ROV form, please provide a specific address and why. If you are working with a real estate agent, they may be able to help you find adequate comparable sales. Keep in mind you cannot use active listings they must be actual recent sales.
Appraisal Independence
Federal law does prohibit anyone from influencing or trying to influence an appraiser’s value conclusion through coercion, collusion, compensation, or intimidation. When you submit your ROV form please avoid the below:
- Giving your opinion as to the correct value or range of values that you desire. You may list the contract price or prior sale price.
- Providing a prior appraisal report. You can include comparable sales from a recent report if they are no more than 1 year old.
- Being disrespectful in providing your narrative about your concerns with the appraisal.
OakStar reserves the right to request you to resubmit your ROV form if guidelines are not followed. The ROV process is not intended to change the value because someone is dissatisfied with the appraisal conclusion or outcome. However, it is intended to assist customers with a path to ensure appraisals are fair, accurate, and free from bias and discrimination.
What you can expect when submitting an ROV form
- Complete the ROV form either on your own or consult with your real estate agent for their input on comparable sales or other relevant information that may be beneficial to your request.
- Complete and sign the ROV form and return it to your OakStar lending team. The form must be returned to your particular OakStar lender or lending team to take action.
- The completed form will be reviewed by your lender to ensure it is completed correctly, provides all required information for the request to be considered, and does not contain any prohibited information. OakStar will then submit the ROV form to the appraiser.
- The appraiser will then consider the ROV request. The appraiser may agree or disagree that an adjustment or correction is needed. The appraiser is an independent valuation professional who will determine whether or not the appraiser report warrants a change and cannot be directed by you or OakStar Bank to change the appraisal.
- Your loan officer will then communicate the outcome of your request to you.