What appraisers can or cannot do?

Ever watched the antiques roadshow? No doubt it has been noticed that the appraised value of Lincoln's toe nail was between $1500-$2,000. Note the appraiser did not say $1,750. That is because he cannot. And it makes sense! The appraiser is given data and that data supplies a value range.

So why does an an appraiser of real estate put an exact figure on value. This is called "a point of value" estimate. It is done purely because the banks want it like that. The adjusted comparables establish a range of the subject property and the appraiser uses a number in that range.

With the current market value ranges are large but good experience will tell an appraiser where to go in that range. The data for active and pending listings is also correlated with data of the closed comparables sales. This very often also points the appraiser in the right direction. Condition can play a role as well but it may not. If you live in a neighborhood of highly upgraded and renovated properties then your highly upgraded and renovated property will be compared to similar properties and no condition adjustments will be made. If you live in the average neighborhood with a variety of property condition and some of them end up on the appraisal then a condition adjustment may be warranted.

So the appraiser can narrow the range by also putting more weight on some data (it is not always good to put more weight on certain properties if the data sample is large).
But by no means can an appraiser put a specific value on something. I guess that it why it is very important to know that the $250,000 stated at the bottom of the report is an "opinion of value ". Now that opinion is said to be market value, which is defined by Fannie Mae... but nonetheless.