The age old question--What do Sellers want! (Isnâ€™t that what Freud pondered?) If you're asking is 20-20% "reasonable" you might get some interesting feedback from some of those Sellers! I think I'd want more data than just one appraisal. We had the same thing happen in our office on a "short-sale" where the "shorted" price was some $200,000 less than what the Seller bought the home for a year ago. The appraisal concurred with the "shorted" price but when you look harder at the deal you see how the then "Buyer's overpaid for the property to get money back for loan fees, rebates, etc.
When I see a flood coming in at such reduced numbers then you know a "trend" is developing! But if we're talking price points of $1,000,000 then we can get into all sorts of funny business with purchases and sales. Make sure your Realtor does an exhaustive CMA (comparative market analysis) for you neighborhood by neighborhood. They can be dramatically different. But by all means, 'tis the season for lowballing