What Lenders
Look For
An appraisal is written for one primary audience: the lender.
Why This Matters
Financing decisions rely heavily on the strength and supportability of the appraisal. Underwriters aren't looking for opinions—they are looking for evidence.
The Lender's Priority
Every part of the report must be consistent and logical. Knowing what lenders examine helps clients avoid unnecessary delays and feel confident in the process.
Underwriting Review Hierarchy
Core Lender Priorities
- Neighborhood proximity & recent sale dates
- Logical matching of style and size
Lenders follow a predictable hierarchy to confirm that the value conclusion is reasonable and aligned with market reality. Market commentary and logical evidence protect the lender and ensure a smooth financing process.
Red Flags Lenders Watch For
These elements trigger immediate questions from underwriters and often lead to funding delays or revision requests.
Weak Comparable Support
Using sales far outside the neighborhood, outdated sales without time adjustments, or value conclusions that contradict the actual market data.
Excessive Adjustments
Large, unexplained adjustments or unsupported lot premiums. Lenders look for a predictable "market logic" in every dollar added or subtracted.
Inconsistent Property Ratings
Conflicting condition ratings, unverified upgrades, or property details that don't match public records without a thorough explanation.
Vague Documentation
Missing or blurry photos, lack of market commentary, and an absence of data regarding local supply and demand trends.
How Underwriters Review Reports
🔍 Property Detail Verification
Underwriters cross-check public records, previous listings, and internal databases to ensure the home's physical description is 100% accurate.
⚖️ Comparable Testing
They look at each sale and ask: "Would a reasonable buyer consider this similar?" If the answer is no, the comparable is flagged as irrelevant.
📊 Adjustment Pattern Audits
Every dollar added or subtracted must reflect actual market behavior and historical trends, not just the appraiser's personal preference.
🚩 Risk & Compliance Assessment
Unusual layouts, legal issues, or unpermitted work receive extra scrutiny to ensure the property meets specific lender and insurer standards.
🏗️ The Goal: Logical Reconciliation
The final value must align naturally with the comparables. Underwriters look for a conclusion that flows from the evidence, never one that stretches beyond it.
Lender FAQ
Common questions regarding lender reviews and report revisions.
Lenders cannot change the value conclusion. However, they have the authority to decline the report or request revisions if they feel the market evidence is weak, inconsistent, or lacks proper support.
No. To maintain professional integrity, the appraiser must remain independent. While clients can provide helpful documents (like a list of upgrades), they cannot provide direction on the final value.
The lender may request additional comparables, further adjustment logic, or clarification on specific property details. In rare cases where significant risk is identified, they may order a second appraisal from a different firm.
Get Expert Guidance Today
If you want clarity before your appraisal or you need help understanding lender expectations, our team is here to help you navigate the process with confidence.
