By Ryan Rodenbeck, Real Estate Expert | Spyglass Realty and Investment, LLC
A low appraisal can stop a Texas home purchase or refinance. That's because the lender bases the loan on the appraised value, not on the contract price. The good news is that an appraisal can be challenged. The formal route is a Reconsideration of Value (ROV), which you request through your lender. This guide explains how the process works for Austin and Texas buyers, sellers and homeowners, what evidence actually moves an appraiser, and where to turn if you believe an appraiser broke the rules.
Key takeaways
- You challenge an appraisal through your lender, not by contacting the appraiser directly. Federal appraiser-independence rules route all communication through the lender.
- For Fannie Mae and Freddie Mac loans, lenders must offer a borrower ROV process. It allows one ROV request per appraisal and up to five alternative comparable sales.
- Your lender must give you a copy of the appraisal promptly, and no later than three business days before closing, unless you waive that timing.
- The Texas Appraiser Licensing and Certification Board (TALCB) handles rule and ethics violations. It does not resolve disputes that are only about value.
- If you believe an appraisal reflects discrimination, you can report it to HUD and other agencies. Appraisal discrimination is illegal.
Step 1: Get and read the full appraisal report
Under the federal Equal Credit Opportunity Act valuation rule (Regulation B, 12 CFR 1002.14), the lender on a first-lien mortgage must give you copies of appraisals and other written valuations. Delivery must be prompt after completion, and no later than three business days before closing, unless you waived that timing. Ask your loan officer for the complete report, including the comparable-sales grid, photos and the appraiser's comments.
Read it closely and check:
- Factual errors: square footage, bedroom or bathroom count, lot size, garage, pool, year built.
- Missed features or upgrades: a remodeled kitchen, new roof, HVAC, solar, added living space with permits.
- Comparable sales: are they truly similar in size, age, condition and location? Are they recent? Were adjustments applied consistently?
- Market conditions: did the report reflect current local trends at the effective date of the appraisal?
Step 2: Build your evidence
An ROV succeeds on data, not disappointment. Work with your real estate agent to put together:
- Up to five alternative comparable sales. They should be closed sales that are similar to your home and that closed on or before the appraisal's effective date. Note the source of each one (for example, the MLS listing or public records) and explain why it is a better fit.
- Corrections to factual errors, with documentation: a survey, permits, a floor plan or appraisal district records.
- Upgrade documentation: invoices, permits and dates for major improvements.
- Specific issues: name the exact sections of the report you believe are wrong and say why.
Step 3: Submit a Reconsideration of Value through your lender
How the ROV works depends on the loan type:
- Fannie Mae and Freddie Mac (conventional) loans: Both agencies require lenders to have a borrower ROV process. Lenders must explain it to you at application and again when the appraisal is delivered. The request must include your name, the property address, the appraisal's effective date, the appraiser's name and the date you submit. It must also identify the specific deficiencies and may include up to five alternative comparables with their data sources. Only one borrower-initiated ROV is allowed per appraisal. The mandatory date was loans with applications on or after October 31, 2024. See Freddie Mac Guide Section 5604.4 and Fannie Mae's ROV Selling Notice.
- FHA loans: HUD added a formal borrower-initiated ROV process in Mortgagee Letter 2024-07. It later rescinded those requirements in Mortgagee Letter 2025-08 (March 19, 2025). An FHA underwriter can still ask the appraiser to reconsider when the appraisal missed relevant information. Contact your lender with your evidence and ask how they handle ROV requests.
- Other loans (VA, jumbo, portfolio, credit union): Ask your lender for its written ROV or appraisal-dispute policy. Federal banking regulators, including the CFPB, issued interagency guidance on ROVs in 2024. It describes how institutions can let consumers submit information that the appraisal may have missed.
Submit everything in writing and keep copies. Ask your lender for an expected timeline. If the appraiser changes the value, the result appears in a revised appraisal report.
Step 4: If the ROV doesn't change the value
- Ask about a second appraisal. Whether one is possible, and who pays, depends on the lender and the loan program.
- Renegotiate. Buyer and seller can agree to a lower price, split the difference, or have the buyer bring more cash to closing.
- Review your contract rights. In Texas, the TREC Third Party Financing Addendum (40-11) covers lender property approval. The optional Addendum Concerning Right to Terminate Due to Lender's Appraisal (49-1) lets the parties negotiate a termination right tied to the appraised value. Deadlines and terms depend on what you signed, so read your contract and talk with your agent or a real estate attorney before a deadline passes.
- Change the loan. A different loan program or lender may be an option, though it usually means a new appraisal and a new timeline.
Step 5: When to file a complaint with TALCB
The Texas Appraiser Licensing and Certification Board licenses and regulates appraisers and appraisal management companies in Texas. It investigates possible violations of Texas appraisal law, TALCB rules and the Uniform Standards of Professional Appraisal Practice (USPAP). Before you file, know what TALCB can and can't do:
- It does not resolve complaints that are only about the appraised value.
- Complaints must be signed. TALCB cannot investigate anonymous complaints.
- The alleged violation must have happened within the previous four years.
You can file through TALCB's online complaint portal. Attach the appraisal report and related correspondence.
If you suspect discrimination
An appraisal may not be influenced by the race, color, national origin, religion, sex, disability or familial status of the owner, the buyer or the neighborhood's residents. If you believe that happened, raise it in your ROV and tell the lender in writing. You can also file a fair housing complaint with HUD. TALCB notes that complaints alleging discrimination may be referred to the Texas Workforce Commission Civil Rights Division.
Contesting a property tax appraisal is different
A lender's appraisal and the county appraisal district's value are two separate things. If you want to lower your property tax value in Travis, Williamson or Hays County, that is a protest with your appraisal district, not an ROV. The process and deadlines are different.
Frequently asked questions
Can I call the appraiser directly to dispute the value?
No. Go through your lender. Appraiser-independence rules mean the lender manages communication with the appraiser, and ROV requests go through the lender's process.
How many comparable sales can I submit?
For Fannie Mae and Freddie Mac loans, up to five alternative comparable sales, each with its data source and your reasoning.
How many times can I request a Reconsideration of Value?
For Fannie Mae and Freddie Mac loans, one borrower-initiated ROV per appraisal. Other loan programs follow the lender's own policy.
Will TALCB change my appraised value?
No. TALCB investigates possible violations of appraisal laws, rules and USPAP. It does not resolve disputes that are only about value.
Does a low appraisal let me cancel my Texas contract?
Possibly, depending on the addenda you signed and their deadlines, such as TREC forms 40-11 and 49-1. Read your contract and talk with your agent or attorney right away.
Do I get a copy of the appraisal?
Yes. For first-lien mortgages, the lender must give you copies of appraisals promptly, and no later than three business days before closing unless you waived that timing (12 CFR 1002.14).
Need help with a low appraisal in Austin?
A well-documented ROV starts with the right comparable sales. Our agents can pull MLS data on recent closed sales near your property and help you prepare your request. Contact Spyglass Realty.
This article is general information, not legal or lending advice. Loan program rules change. Confirm current requirements with your lender, and consult a real estate attorney about your contract rights.
Spyglass Realty and Investment, LLC, TREC Broker License #588051. Designated Broker: Ryan Rodenbeck, TREC #528651. TREC Consumer Protection Notice | Information About Brokerage Services
