ROVs—short for Reconsideration of Value—have been around for years. They come into play when a borrower, lender, or Realtor feels that an appraisal value is too low (you’ll notice no one complains when the value is too high!). In that case, they can submit an ROV and provide additional sales for the appraiser to review and consider.
Here’s the issue: you now have non-Appraisers telling the Appraiser which sales to consider instead of the ones already researched and selected in the report. What many don’t realize is that appraisers review many potential sales before narrowing them down to those most representative of the subject property’s market value.
The ROV process often feels like the tail wagging the dog:
“I don’t like your value, so here are some other sales I think you should use to raise it.”
As of the updated guidelines, here’s what you need to know:
Lender Review First Before an ROV is sent to the Appraiser, the lender must review it. They need to determine whether the new sales provided could actually make a difference in the value. Even more importantly, the ROV must explain why the new sales are better than the ones the appraiser originally used, and specifically what is flawed or non-comparable in the original report.
Limit of Five Sales An ROV can only include up to five additional sales for review.
Only One ROV Allowed Each appraisal report may only be reconsidered once.
If you plan to submit an ROV, make sure it’s backed by valid support. Simply sending in sales with higher prices in hopes of pushing the value up won’t work.
Lenders must provide borrowers with the ROV form and option both before and after the appraisal. Unfortunately, this will likely slow down the process, creating delays for all parties involved.
It’s also important to note: Appraisers cannot charge extra for reviewing ROVs, even though these reviews take additional time. That makes it even more critical for lenders and borrowers to follow the rules and only submit ROVs when there is a clear and valid reason to challenge the original appraisal.