Low FHA Appraisal with possible errors

[Anonymous]

Hey everyone! First time poster and home buyer here. I wanted to get anyone and everyone's advice on a situation I am having as a buyer.

We had an FHA appraisal done on a home. We offered 138,800. The appraisal came back at 111,000. It was a big shock, but the appraiser did not seem to use appropriate comparable homes, which worried that we might be victims of a negligent appraiser.

The new home is in an HOA, where multiple comparable homes have sold in the last year. The appraiser did not use any of these homes as comparables.

The appraiser used other comparable homes within the city, but these homes all have 10,000sq/ft less lot size than the new home. This home also has a remodeled kitched and bathroom, with half an acre of lot completely fenced in.

We asked for the appraiser to change the appraiser to at minimum reflect homes with comparable lot sizes within our HOA. He has completely refused. My concern is that in FHA guidelines it states the following;

For properties in established subdivisions, or for units in established condominium or PUD projects that have resale activity, the appraiser should use comparable sales from within the same subdivision or project as the subject property if there are any available. Resale activity from within the subdivision or project should be the best indicator of value for properties in that subdivision or project. If the appraiser uses sales of comparable properties that are located outside of the subject neighborhood, he or she must include an explanation with the analysis.

Since the apprasier provided no explanation about why other comparable homes outside the HOA were used and refuses to update with accurate comparable homes, is there anything we can realistically do to resolve this?

Any and all advice is very much appreciated, and thanks everyone in advance.

[StartingOver10]

It is tough to fight the appraisal. But since you have provable errors (non-comparable properties) send the comps to your LO so he can begin the review process. I have never been able to overturn a low value, even when there have been obvious errors. The review process is useless in my opinion. For the last appraisal I had reviewed they used a review appraiser 1/2 way across the country and the value remained.

Lately I have noticed that many of the high LTV appraisals, most especially FHA appraisals, come in low. We end up having to renegotiate with the seller. Occasionally it is so obvious that the comps have huge adjustments to lower the value that the buyer pays the difference if they have the resources. I have a theory about this recent rash of low appraisals but will refrain from writing it here....