Understanding the Factors that Could Lead to Differing Appraisal Results

Studies show that educated, licensed appraisers are much less biased than untrained appraisers.  This could be attributed to the simple and somewhat obvious fact that if they are properly trained, they are better able to recognize the factors that should form their opinion.  That being the case, the results they produce in turn are not truly an opinion, but facts stated based on information gathered during the appraisal.  Appraisers that are not formally trained will likely be much more susceptible to outside factors that should not affect the results of the appraisal.

 For whom is the Appraiser Working?

There are typically no more than two appraisals done on one property at a time.  These are initiated as one by the seller and one by the buyer.  It is possible that for untrained appraisers, the seller appraisal is higher than the borrower appraisal.

 Who Hired the Appraiser?

Appraisers can be hired or court appointed.  It is really no surprise that court-appointed appraisers that have been thoroughly educated are less biased, in general, than untrained customer-hired appraisers.  This could be for many reasons, but most likely it is simply common sense.  The court is an unbiased party and will be unmoved by the results.  Untrained appraisers that are being paid by a biased party are likely to be more biased themselves as an innate matter of survival.

Though all of these factors could result in appraisals on the same property that vary significantly, most of them can be eliminated on the front end.   Still, in the end, appraisers are human, and humans are not all the same.  Therefore, they will not all produce the same results, often time regardless of the precautions taken.