Appraisal review disputes and additional evidence requests

A useful appraisal review request identifies a factual or analytical issue and supplies evidence that could change its treatment. A request that merely says the value is too low gives the reviewer little to investigate. Organize the submission so the lender can distinguish an incorrect fact, missing evidence and a reasonable disagreement requiring professional judgment.

The interagency appraisal guidance, sections V and XV allows consideration of additional information and correction of errors while protecting appraisal independence. The process below is an original commercial financing workflow. It does not promise a revised value or import residential reconsideration procedures into every commercial transaction.

Classify the issue before writing the request

Use four categories. A factual discrepancy concerns something verifiable, such as building area, lease commencement or a recorded sale date. Missing evidence concerns a relevant document or transaction that was not considered. Methodological clarification asks how a disclosed assumption was applied. A judgment disagreement concerns the weight or adjustment the appraiser assigned to evidence.

These categories can overlap, but they should not be blended into a demand for a particular number. A correct rent roll may justify reconsidering income without proving that a particular capitalization rate must change. A larger building area may affect a per-square-foot comparison without increasing income or value proportionally.

Build a focused discrepancy schedule

Assume a hypothetical report lists 48,000 rentable square feet, while a current professional measurement and executed lease exhibit support 50,000. The report also uses $420,000 of annual base rent, while signed amendments and the payment ledger support $440,000 for the same effective period. A proposed comparable sold after the appraisal’s effective date.

Include filenames, dates and page references. “Attached are many documents” shifts the work of identifying the issue onto the reviewer and increases the chance that the relevant evidence is missed.

Quantify a question without dictating a conclusion

The area discrepancy is 2,000 square feet, or 4.167% of the reported 48,000. That does not establish a 4.167% value increase. The property may already be fully represented in the income analysis, and the measurement basis may differ.

The rent discrepancy is $20,000 annually. If, solely for a sensitivity, all of it were accepted as recurring incremental cash flow and capitalized at 7%, the indicated change would be $285,714.29. At an assumed 65% LTV, the corresponding loan effect would be $185,714.29 before other constraints. Present this as the financing team’s sensitivity, separate from the appraisal submission, not as the value the appraiser is expected to produce.

If the same additional rent requires $5,000 of incremental unreimbursed incremental expense that was omitted from both schedules, the net income question becomes $15,000. The sensitivity then falls to $214,285.71 of value and $139,285.71 of hypothetical loan capacity. A complete request should disclose unfavorable related evidence as well as favorable evidence.

Control dates and versions

An appraisal has an effective date, a report date and an intended use. A new lease executed afterward may be useful for a later credit decision without proving that the earlier opinion was wrong. Ask the lender how to route subsequent events instead of mixing them with corrections to facts existing on the original date.

Maintain a log showing submission date, lender contact, issue number, response, revised report reference and credit-model change. If a correction changes income but not the final value, preserve the explanation. A completed review is not synonymous with a higher conclusion.

Do not edit the appraiser’s report, remove qualifications or circulate a borrower-created “corrected appraisal.” Use a separate evidence memorandum with clearly identified author and status. Keep the original report intact and retain any revision issued through the appropriate process.

Match escalation to the unresolved issue

If a factual discrepancy remains unresolved, ask for the lender’s stated review path and what additional evidence would help. If the disagreement is professional judgment, a different document may not resolve it. The lender may seek further review under its own policies; the borrower should not assume a right to select the highest of multiple opinions.

Before paying for another report, identify who will order it, whether it will be acceptable for the intended financing and what question it is meant to address. A borrower-commissioned opinion may help internal planning while having a different role in the lender’s approval process.

The final package should be short enough to review but complete enough to reproduce each factual claim. It should explain what is disputed, what evidence supports the request, which dates apply and what response would close the issue. That approach preserves independence while giving the financing team a usable record of how the valuation concern was resolved.