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Trulia San J…, Home Buyer in San Jose, CA

How often is there a disagreement on the results from a home appraisal?

Asked by Trulia San Jose, San Jose, CA Thu Oct 25, 2012

What are the most common disagreements?

Help the community by answering this question:


Appraisers work independantly from lenders and realtors. To reach an assessed value on a home in escrow, an appraiser uses multiple tools for the evaluation. One of these tools is to look at recently sold homes in the same area and of similar style, size, etc.

The most common reasons there are disagreements with an appraised value are the properties used for comparison, and the condition and quality of the home being appraised versus those it is being compared against.

If there is a dispute, sometimes lenders or real estate agents will request a second appraisal, but more often the parties involved in the home purchase negotiate a solution.

I have not answered the specific question: how often does this happen? I am not familiar with statistics reflecting how often this happens. It does happen, especially when we are in a market of increasing values (such as we see today).

Sally Blaze
Alain Pinel Realtors
DRE 01856137
0 votes Thank Flag Link Thu Oct 25, 2012
The question may have been better phrased what type of disagreements and how do they affect the sale? Charles answered very clearly.
Web Reference:
1 vote Thank Flag Link Thu Oct 25, 2012
Thank you for your question:

I am a former Real Estate Appraiser and a former Review Appraiser, and expert witness in court and arbitration cases with respect to fair market value of real estate.. This is an issue that I consider to be very important.

Yes there are often disagreements on appraised values.

Common sources of disagreements are areas that are very subjective and prone to error such as adjustments that are made for differences in location. The classical example is a house on a busy street, where some of your comparable sales are on quiet streets. The value of the adjustment is time consuming to perform properly and involves some very subjective decision making on the part of the appraiser.

Another common source of error is the use of comparable sales where the houses are in different school districts. For example in Saratoga there are 3 different school districts. The houses with Saratoga schools sell for very different prices when compared with similar homes with the Fremont Union High School District (Cupertino Schools) and similar homes with the Moreland (Campbell ) School District.

A good real estate appraiser will make absolutely certain that the subject property and the comparable sale properties all are in the same school district.

Another source of error is negligence on the part of the Appraiser. I have seen appraisals with incorrect square footage listed for the comparable sale properties. This is often caused by errors in the square footage reported by the listing agent and the County Assessor's Office. Usually the square footage for the subject is correct because the appraiser has access to measure that property. If the appraiser cannot measure the square footage for the subject property correctly, that appraiser is not competent to even be an appraiser.

I have also seen appraisals where the appraiser has described the property incorrectly. For example in one appraisal that I reviewed, the appraiser described a comparable sale property as having a 2 car garage where the appraiser's own picture in the appraisal report showed the comparable sale property had a 1 car garage, not a 2 car garage.

These are merely a few examples of sources of error and sources of disagreement in an appraisal report. There are many more that would be to much to list and describe here. For more information you may call me at my cell phone: (408)509-6218, or you may send me an email at my email address:

Thank you
Charles Butterfield MBA
Real Estate Broker/REALTOR
American Realty
Cell Phone: (408)509-6218
Fax: (408)269-3597
Email Address:
1 vote Thank Flag Link Thu Oct 25, 2012
Frequently. In a rapidly escalating market such as the one in which we find ourselves, appraiser opinions (and an appraisal is simple an opinion) are typically lagging behind the market.

Here are a few posts that make help you understand the issues:

Appraisers Struggle To Keep Pace with Market…

Appraisers Struggle To Keep Pace: Part 2…
1 vote Thank Flag Link Thu Oct 25, 2012
Surprisingly, not very often in today's market. Out of 10 transactions in the last 7 months, I have only experienced one, and am somewhat convinced it is because the appraiser would not meet with me. It's important with our current increase in market values due to low inventory, multiple over asking offers as well as job growth in tech sectors, that the agent meet with the appraiser and provide them with accurate and current comps and graphs. As we all know, real estate is very local, and not every appraiser knows the neighborhood. Realtors, agents and lenders are finding that we need to sometimes project values as pending sales may have not caught up, and it's important to note this with appraisers so that they can provide details for the underwriters who ultimately determine the value.
0 votes Thank Flag Link Mon Oct 29, 2012
I have only had a disagreement on an appraisal one time in seven years.

All my best,
Dot Chance, Realtor®
Certified Distressed Property Expert – CDPE®
DRE License #01494182
Keller Williams Realty World Media Center

WHEN YOU THINK OF REAL ESTATE...Think! My business thrives from your referrals!
0 votes Thank Flag Link Thu Oct 25, 2012
In areas where there is a lot of competition between buyers, the seller often chooses to sell to a buyer having a large down payment. If there is a disagreement on the value of the home, a loan can still be obtained. It is not rare to have a home sell for more than appraised value. The buyer who purchases the home is typically willing to pay more than most of the people who visit or make an offer on the home.

The appraiser is providing his most accurate opinion of what the house can be sold for. The lender is counting on him so that they can evaluate the risk. The lender may ask for a larger down payment or increase the interest rate they will make the loan at if the appraised value is low.

An experienced seller's agent will make certain that the appraiser is aware of favorable features of the home and of favorable comparable sales. The agent also knows which lenders are more likely to approve a loan.

Different areas have different sales prices for very similar homes. An appraiser may not be as familiar with a neighborhood as a real estate agent who does a lot of business there.

Juliana Lee MBA LLB

Top 3 agent nationwide at Keller Williams
Over 20 years experience
Web Reference:
0 votes Thank Flag Link Thu Oct 25, 2012
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