Sometimes what happens is the Computerized AVM that grades the appraisal comes back with a lower number that is used instead of the appraisal. Here is some basic information on it:
AVMs which the banks are now using, are computer programs that grade & give an "appraisal" value by blindly generating an appraised value for a home with very faulty data. This computer "analysis" is based on multiple regression analysis with a large amount of the most pertinent variables, including your homes actual condition, its actual verified size, and your location removed from their equation. Only after AVMs find the appraised value do they begin searching to find what they consider likely comparables. Commonly the appraisals do not line up with the value of the appraised value is from the actual appraiser who inspected the home. The lower of the two is used which is usually the AVM that is computer generated.