Ask An Appraiser — Goodwin Appraisals

My appraisal came in low. Now what?

Julia G. Goodwin — Fri, 16 Oct 2026 00:00:00 GMT

Your appraisal came in below the contract price. Before you do anything else: don't call the appraiser. Here's what actually works.

Why not the appraiser?

On a mortgage, the lender is the appraiser's client, not you or your agent. Confidentiality rules limit what the appraiser can discuss with anyone else, and appraiser independence rules exist so that nobody in the transaction can lean on the person estimating value. A phone call won't change the report. It just uses up time you don't have.

The formal process: Reconsideration of Value

For conventional loans, Fannie Mae and Freddie Mac require lenders to offer a Reconsideration of Value, or ROV, on applications dated on or after October 31, 2024. The key rules:

You get one borrower-initiated ROV per appraisal, so make it count.
It goes through your lender, who has to tell you how to submit it and how long it should take.
You can include up to five alternative comparable sales, each with a short explanation of why it's relevant.

FHA loans have a similar lender-run ROV process for case numbers assigned on or after September 2, 2024. Your loan officer can tell you exactly how your lender handles it.

What helps

Factual errors. A wrong bedroom or bathroom count, missed square footage, an update that wasn't noted, the wrong lot size. These are the most direct fixes.
Closed comparable sales the appraiser may not have considered. They should be recent, nearby and genuinely similar, with a reason for each. Sales that closed after the appraisal's effective date generally don't help.
Specific, short, organized information. One page of facts beats five pages of frustration.

What doesn't help

The list price, or the contract price itself
Online automated estimates
What you or the seller paid for upgrades
The number you need it to be

The honest part

Sometimes a low appraisal is a fixable error. Sometimes it's the market telling you something real about the price. A good ROV request can tell the difference, which is exactly why it should be built from facts and closed sales rather than hope.

If you want help understanding the process before you submit, that's what Ask An Appraiser is for. Julia can't change or second-guess another appraiser's report, but she can explain what makes a request clear and complete.

Your $60,000 kitchen didn't add $60,000

Julia G. Goodwin — Sat, 17 Oct 2026 00:00:00 GMT

"We spent sixty thousand on the kitchen. Why didn't the appraisal go up sixty thousand?"

It's a reasonable question with a frustrating answer: the appraisal was never adding up receipts.

Cost is not the same as market value

An appraisal estimates market value: what a typical buyer would likely pay, based on what buyers have actually paid for similar homes. To understand how much a kitchen is worth, the appraiser looks at sales of comparable homes with and without similar updates, and at what the difference between them shows.

What the work cost, how long it took and how much you love it aren't part of that math. The market's reaction is.

Why the gap happens

You're catching up, not pulling ahead. If most comparable homes nearby already have updated kitchens, a new kitchen brings your house up to the level of the competition. That matters, because an unupdated kitchen would likely have counted against you, but it may not register as a premium.

You've gone past what the area's buyers pay for. When a renovation puts a house well above the typical home around it, buyers in that price range may not pay for all of it. Appraisers call this over-improvement, and it's one of the most common reasons renovation dollars don't translate into value.

The rest of the house still matters. A new kitchen in a house with an aging roof and original systems is rated as exactly that. Under the new appraisal report, interior and exterior condition and quality are rated separately, so the full picture is recorded.

What actually helps

A written update list. What was done, when, and whether it was permitted. It makes sure nothing gets missed at inspection.
Quality you can see and document. Materials, workmanship and scope all affect the quality rating.
For investors and flippers: know the top of the comparable sales range before you choose finishes. The market's ceiling doesn't move because the budget did.

A renovation can absolutely add value. It just adds the value the market supports, not the value on the invoice.

Horror story: the bedroom that used to be a garage

Julia G. Goodwin — Sun, 18 Oct 2026 00:00:00 GMT

This is a composite story. The details come from several situations and have been changed so no client, borrower or property can be identified. The lesson is real.

The listing said four bedrooms. The appraisal said three. The buyer had already waived the inspection contingency to win the house.

The story

A buyer falls for a 1970s ranch. Three bedrooms in the original house, plus a fourth that the listing calls a "bonus bedroom." It used to be the garage. The conversion has carpet, a closet, a window air-conditioning unit, and a space heater in the corner. It isn't connected to the home's central system. The floor sits a step lower than the rest of the house, and nobody can find a permit.

What happened in the appraisal

When an appraiser reports a home's finished living area, the question isn't whether a room has carpet and a bed in it. It's whether the space is finished and usable year-round the way the rest of the house is, with similar walls, floors, ceilings and systems.

This room didn't meet that test. It was still reported, as space with some utility, but not as part of the finished living area or the bedroom count the listing advertised. The comparable sales then had to be compared against a three-bedroom house with a converted garage, which is a different property from a four-bedroom house.

The nuance

Unpermitted doesn't automatically mean the space gets no value. Appraisers report what's there, comment on the quality of the work, and analyze how buyers in that market actually treat it. Sometimes the market pays something for the space, and sometimes it doesn't. Some loan programs and lenders also have their own requirements on top of that.

What changes is the certainty. A converted garage is one of the most common gaps between what a listing says and what an appraisal can support.

Three checks before you offer

Ask for permits for any conversion, addition or finished space that wasn't original to the house.
Check heating and cooling. Is the room served by the same system as the rest of the house, or by a window unit and a space heater?
Ask your agent how comparable homes were treated. If similar homes nearby with converted garages sold as three-bedroom homes, expect the appraisal to see it the same way.

None of this means you shouldn't buy the house. It means you should know which house you're buying.

Why the appraisal's square footage doesn't match Zillow

Julia G. Goodwin — Mon, 19 Oct 2026 00:00:00 GMT

It's one of the most common calls after an appraisal comes back: "The listing says 2,600 square feet. Your report says 2,340. Where did 260 feet go?"

Usually nowhere. The house didn't shrink. It was measured by a different set of rules.

The appraiser follows a national standard

For conventional loans, Fannie Mae and Freddie Mac require appraisers to measure detached and attached homes, including townhomes and manufactured homes, using the ANSI Z765 standard on appraisals with an interior inspection and on hybrid appraisals. Listing sites, older tax records and builder plans often rely on other sources and other methods, or simply repeat a number someone entered years ago.

What doesn't count as finished above-grade area

Under the standard, a few kinds of space are reported separately from the home's main finished area, even when they're nicely finished:

Anything partly or fully below grade. If any part of a level's walls is below ground, that level is reported as below-grade area. A finished walk-out basement still goes in this category.
Low ceilings. Finished areas need a ceiling height of at least 7 feet. Under a sloped ceiling, at least half of the room's finished area must be 7 feet or higher, and any portion under 5 feet doesn't count.
Openings to the floor below. The open space above a two-story foyer or great room isn't floor, so it's excluded.
Finished space you can't reach from inside, or can only reach through an unfinished area, such as a room over a detached garage. It's reported separately as well.

Stairs count toward the floor they descend from. Measurements are taken to the nearest inch or tenth of a foot, and the total is rounded to the nearest whole square foot.

What this means for you

Buyers: be careful comparing price per square foot when the number didn't come from a measured appraisal. Two "2,600 square foot" homes can be very different houses.

Sellers and agents: if the home has a finished bonus room with knee walls, a two-story foyer or a finished lower level, expect the appraisal's number to differ from the listing. Setting that expectation early saves a hard conversation later.

The space that's excluded from the main finished area is still reported and still considered. A finished basement isn't ignored. It's simply valued as what it is, rather than as above-grade living space.

The appraisal report is changing. Here's what buyers and sellers should know.

Julia G. Goodwin — Tue, 20 Oct 2026 00:00:00 GMT

For more than twenty years, most conventional mortgage appraisals came on one of a handful of standard forms. If you've bought a house with a conventional loan, the report you got was almost certainly one of them. That era is ending.

What's changing

Fannie Mae and Freddie Mac have redesigned the Uniform Residential Appraisal Report. The industry calls the new standard UAD 3.6. Instead of a separate form for a house, a condo, a small multifamily property or an exterior-only inspection, there is now one report that adapts to the property being appraised.

The new report became required for new appraisal submissions to the GSEs on November 2, 2026. In September, the GSEs also announced a temporary exception: lenders that requested it can keep submitting the older format until May 19, 2027. So for the next several months, two buyers closing in the same week could receive two very different-looking reports.

Why it matters if you're selling

The new report is built on structured data, and it asks for much more specific information about the home's features, updates and condition. Condition and quality are now rated separately for the interior and the exterior.

That cuts both ways. A well-maintained home with real updates has more room to show it. A house with a new kitchen and a twenty-five-year-old roof will have both of those facts recorded clearly.

What to do: before the appraisal, write down every meaningful update. For each one, list what was done, the year, and whether it was permitted. Give that list to your agent to pass along. Appraisers can only report what they can observe or verify, and a clear list keeps work from being missed.

Why it matters if you're buying

Expect a longer report with more detail, and read all of it, not just the value on the first page. The condition and quality sections will tell you a lot about the house you're buying.

Square footage will generally be measured to the ANSI standard. That may not match the listing or the county's tax records, which is its own topic.

What to do: ask your lender whether your loan's appraisal will use the new report or the older format while the exception is in place. Either is legitimate right now. Knowing which one you'll get helps you read it.

Why it matters if you're an agent

The data an appraiser needs at inspection has grown. Access to every structure on the property, information about additions and permits, and a clear update history all make a difference. This is the topic of the first Ask An Appraiser lunch sessions, and the best time to learn it is before your next listing appraises, not after.