The data for most SFR appraisals will result in a range of indicated values and – except for condos – it would be exceedingly rare for 3 or 5 comps to legitimately adjust out to the same pinpoint value. If a pending saleprice is within that adjusted range most appraisers will generally pin that tail on that number. We sometimes refer to that as a “tie goes to the runner” situation wherein a contract between a willing buyer and seller is considered just as valid an indication of market value as any other piece of market data. We don’t ignore it but we also don’t let it override everything else.
You may or may not be familiar with how loans are underwritten, but if an appraisal “misses” a sale price by even $1,000 it can mess up the loan application even though the variance on a $500k loan is literally within the margin of error. Although they should, these lenders don’t use a whole lot of discretion in calling reasonable equivalencies for loan purposes. For their purposes the appraisal either comes in at the sale price or else they may decline the loan application. As a result, appraisers almost never come in short if it’s within that margin of error because we can never be so certain that our outside data will override the indication from the contract at such a small amount. An appraisal will usually either come in at the contract price or if it does come in low it’ll be clearly outside that margin of error.
You’re are right about it looking suspicious though – and it’s definitely something that always bears some scrutiny.
