Many people believe that appraisers can tell you the value of a home. Not true. The appraiser can only draw upon criteria such as size, recent sales, age, and lot size. The market knows the true value because buyers also consider the aesthetics of light, decor and setting; neighborhood status; proximity to town centers, time on the market, available alternatives, and other factors.
Typically, an appraiser is hired by the buyer’s lender to validate the loan amount. While an appraisal doesn’t set the price, it can affect the sale. If the appraisal is too low, buyers may fail to get the mortgage, or a lender may refuse to loan the full amount. At this point, the seller must decide whether to accept a lower price, or lose that buyer.
Though the buyer pays the appraiser’s fee, the appraiser has no responsibility to the buyer. Most courts agree that a buyer cannot act against an appraiser hired by a lender, though based on a recent Court of Appeals case, that may be changing.