Reconsideration of Value

A Reconsideration of Value (ROV) is created by an applicant and is a request for the appraiser to reconsider the analysis and conclusion provided on the initial appraisal report. The applicant will provide additional information that they believe may impact the initial appraisal valuation. Information on how to complete and submit an ROV is included below. Only one ROV request is permitted per loan file. ROVs must be submitted to the bank within five (5) business days after receiving the appraisal and before closing.


Appraisals

An appraisal is an unbiased professional opinion of a property’s value. Appraisals are completed by licensed real estate appraisers who adhere to strict appraisal form and data requirements. Appraisals compare a property to other recently sold properties in the market to develop a “fair market value”. Appraisals are then used by mortgage lenders to ensure the collateral used to finance a mortgage loan has adequate value to support the loan amount requested. Licensed appraisers are required to follow the systemic procedures defined by the Uniform Standards of Professional Appraisal Practice (USPAP). These requirements were designed to ensure unbiased valuations of property.

 

Instructions for Requesting an ROV

Peoples Exchange Bank is committed to appraisal valuation transparency and fair treatment for all its customers. Review the process below to submit an ROV request.

The ROV form will ask for the purpose of the request. Use this section to indicate the reason for the ROV request. Options include:

· Additional recently sold comparable properties provided for consideration.

Select this option if you are providing additional, previously sold comparable properties that you believe will impact the appraisal valuation.

· Factual error contained in appraisal report.

Select to identify factual errors in the appraisal report.

· Appraisal Misconduct

Select if you feel the appraiser has violated USPAP standards outlined by the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA).

· Appraisal bias or discrimination concern

Select if you have concerns the initial appraisal valuation reflects appraiser bias or discrimination.


General Guidelines of Acceptable Comparable Sales

Appraisers are responsible for determining and selecting comparable sales that are the best and most appropriate for the appraisal assignment. To do this the appraiser takes into consideration a variety of factors and follow the general guidelines below. This information should also assist you with completing the ROV form.

  1. A minimum of two (2) comparable must be provided, with a maximum of five (5).
  2. Only include relevant comparable sales which closed prior to the effective date of the appraisal.
  3. The comparable sales must be a finalized purchase; listings or contingent sales are not eligible for consideration.
  4. The closing date must not exceed 12 months prior to (or later than) the effective date of the appraisal.
  5. The comparable sale(s) must be in close proximity to the subject property. While the definition of proximity may differ based on whether the subject property is located in a rural or urban area, closer comparables that exhibit similar characteristics are more likely to be deemed suitable and acceptable. If the subject property is within a subdivision, condominium complex, or planned unit development (PUD), recent sales of similar homes within the community hold greater relevance.
  6. The Gross Living Area (GLA) of the comparable should closely match that of the subject property; in general, the variance in GLA should be within +/-20% of the subject property.
  7. Comparable sales should share similar attributes, including home style, lot size, GLA, room/bedroom/bathroom count, age, condition, and construction quality.
  8. The ROV may or may not result in a change to the report or the opinion of value.
 

Appraiser Independence Requirements

Appraiser Independence Requirements prohibits anyone from attempting to influence an appraiser’s valuation. ROV forms will be reviewed to ensure there is no evidence of attempts to coerce, collude, compensate, or intimidate an appraiser for the purpose of influencing their value consideration. To avoid the appearance of influence please consider the guidance below when completing the ROV form:

  1. Do not provide a previous appraisal report. You may use a previous report to obtain additional comparable sales if they are timely.
  2. Please be respectful when completing the reason for the ROV form submission.
  3. Conventional, FHA, USDA Loans Only – Do not provide the appraised value, value range, or a final market value you want to achieve.
  4. An ROV form may be rejected or requested to be recompleted if the above guidelines are not met.


 

Complete the ROV Request Form here.


Submission of the ROV Form

When the form is submitted, it will be sent to Peoples Exchange Bank’s mortgage department for review and submission to the appraiser listed. A response will be provided to you within 10 business days of submission.

If you have any questions on how to complete the form, please contact your Real Estate Agent (if you have one), your Loan Officer or email mortgageops@pebank.com with the subject line “ROV Request Form.”