A property is under contract for $355,000. Why would an appraiser NOT likely appraise the property for $354,000 in this situation?

• A. Because contracts prevent deviations
• B. Because in most markets, the data does not lend itself to precise values
• C. Because comps always land on 355k
• D. Because appraisers avoid minor differences

Answer: (B)

The idea here is that appraisal values come from market evidence, not from the contract price, and market data usually yield a range rather than an exact dollar amount. An appraiser looks at recent comparable sales, current listings, the property's specific features and condition, and the timing of the sale, then makes adjustments to arrive at an opinion of value. Because those data sets are inherently imprecise and involve interpretation, the resulting appraisal is typically within a range and not compelled to match the contract price exactly.

So, even though the property is under contract for 355,000, the appraiser wouldn’t be expected to peg the value at 354,000 if the market evidence supports a value elsewhere within the observed range. The contract price is not a guaranteed value; the appraisal reflects what the market data justify.