There are many questions that homeowners, buyers and realtors have about an appraisal. It is very important to ask these questions. To better understand the appraisal it is sometimes necessary to question things. Due to the falling of values there are alot of comments made about the appraisal. The words "incompetent" are now being heard when the value is not what was expected. It is important to find an appraiser in the area of the subject property but it is also important to understand the appraisal. The appraisal asks for 3 comparable properties. The appraiser analyzes the whole market area and looks at many comparables sold and chooses the three that are most comparable. Currently many appraisers are adding more than three to help support value. The appraiser can not ignore comparables in the market area to find higher comparables in a competing market. Due to the declining market and economic conditions there are stricter guidelines the lenders are requesting when choosing comparables. The job of the appraiser is to protect the lender. The purpose of the appraisal is to determine fair market value not the highest value or lowest value but "fair". The appraiser tries to use comparables that are an arm's length transaction but if the neighborhood is influenced by bank owned or preforclosures the property could be affected. Why would a buyer pay more for your property when they can get the same home for less? The appraiser looks at active listings as well. Appraisals go through an underwriting process and many use AVM's to see if the appraisal is fair. Sometimes there is a lack of data available for the appraiser. I encourage everyone to ask questions if they do not understand the appraisal. Understand that the appraiser has confidentiality rules to abide by and sometimes can not disclose information to someone other than the client. The appraiser will help you talk to someone who can further answer your questions.