How to Handle Appraisal Discrepancy

[Isaac Pepper]

I am currently in the process of a cash-out refi. The appraisal came back in the ballpark of what I expected. However upon reviewing it I see that the appraiser used a building sketch showing a 5'x12' "open porch". He subtracted this area from the living space square footage. This area was converted to a living space long before I bought the property.

Two of the three comps were a decent bit higher and mine was only adjusted based on square footage.

According to the appraisal, the property has 752 square feet of living space. The area in question measures 60'. This may not sound like a substantial amount, however 752/60=12.5%. I feel that 12.5% of the

property's value was not accounted for. 

Taking the appraised amount of $27500 and dividing by 752 sq ft rounds to $36.57 per sq ft. Adding the additional 60 sq ft at $36.57 per sq ft equates to an additional $2205 of property value. This would grant me an additional $1653.75 at 75% LTV.

The issue I'm having is I doubt that this work was permitted. I am unfamiliar with how the city requires permits. And I'm not sure that $1653 is worth the permit man to be on my back. But the appraiser has already seen the property and has a picture of this room. So if he was going to report me to the Horrible Landlord Hotline he would have already.

If this was you, would you contest the appraisal? I'm just starting out every dollar counts.