"When Justin Olson put his Southwestern-style ranch house outside Phoenix.."

Real estate is local.

The NYT had to go to Phoenix to find an example?

Useless news for NYC.

When in trouble,
when in doubt,
Run in circles,
Scream ad shout.

I just had an appraisal done a couple of weeks ago for a refinance and thought is was very fair/accurate. I don't think I would put my house on the market without getting an appraisal for this exact reason.

Ours, for a refinance, came back low. We told the credit union we thought so. They had a process whereby we could submit a letter with other comps we thought should have been used and why the ones that were used should not have been used, etc.

We were able to do that, and our appraisal was "reappraised" for about 15% higher--which is more what we were expecting. It didn't cost us anything to do and meant we had more money to work with for our remodel (which was part of the reason we were doing a refinance).

We are in the midst of refinancing to take advantage of low mortgage rate. The appraisal came back very low, lower than the 3 recently SOLD houses they used in the appraisal. Each one of them is smaller in house and property size, and all of them are in less desirable neighborhoods.

Since we are refinancing the mortgage balance, which is way below the appraisal value, we did not take any action to correct the value. We would ask for a re-appraisal if we want to take equity out, or use it as a reference to set selling price.

We noticed that house price in Phoenix, at least around our area, has been going up. For more than one year, we heard over and over from friends who are buying, and folks we know in mortgage and real estate business bidding war is coming back.

I also had a low appraisal come back for a refinance. The house next door sold a few months ago. It was smaller house, on a smaller much less attractive lot. Our house appraised for $639K when that house sold for $675. The other "comps" were't really comparable. Go figure.

The kitchen pictured in our appraisal report was not ours, and one of the "comp" photos was not for the right house. The appraisal had the cost value of rebuilding at $100 sq ft compared to $150 sq ft used in an appraisal done on our home 18 months ago. Made me think the appraiser was totally incompetent.

I did appeal and am waiting to hear...

If the appraisal is high enough for the refinance terms you want just move on.

You do not need to do anything but complete the refinance

Ours came back higher than I thought. But we live in a unique place where the property values are quite high and because it is an island, there is a sense of exclusivity. I was very surprised it came back so high and my bank thought it might come in even higher than it did. I am happy as it put us at 65% loan to value.

We just did a refinance and the appraisal was very well done and the house appraised for more than we had paid for it less than a year ago. The appraiser came out to the house and was very thorough and familiar with the area. She asked us about improvements we had made and asked us if we had any houses to suggest she use as comps other than what was in MLS (she said she did this in case we knew of any FSBOs that wouldn't be in MLS). She noted in the appraisal that the sale to us was a divorce situation. I thought the appraisal was fair and had no complaints.

Brick eye, if you were at all familiar with the New York Times you would know that many of their articles, whether business, real estate, politics or general news related, are written to interest the national readership of that paper. And many people who live in the tri-state local area have second homes or businesses with branches elsewhere, and others are just interested in what goes on outside their own state. My DD lives on the east coast and commutes to Phoenix four days a week, so she is interested in real estate values in more than one market. Appraisal data is local, but interest isn't.

Numbers junkie, from what you describe your appraiser WAS an incompetent idiot, and either lazy or intentionally fraudulent. S/he should be reported to whatever Credentialing board gives appraisal licenses in your state. One bad appraisal won't be sufficient to yank the license unless it involves malicious or fradulent intent, but yours maybe the final one to establish a pattern of incompetence that will that that person out ofthe business.

Similar to others in this thread, the appraisal on a home I have purchased came in low. The appraiser erroneously wrote up the appraisal as a short sale and selected comps which in fact were not comparable. We pointed out the short sale error and were told that it was a typo (hmmmm...) and also provided more representative comps. The appraiser stuck to his original appraisal and I had to make up the rest in cash (the actual asking price was fair).

What we learned:
1. Factual errors are not uncommon (e.g. getting the number of rooms or square footage wrong). Those are likely to make the most difference when challenging an appraisal.
2. Providing more representative comps may or may not have any influence (it did not in our case).
3. Large banks charge you an arm and a leg for the appraisal, farm it out to the lowest cost appraiser and pocket the difference.
4. Appraisers may or may not be familiar with your local market - ours was from outside the area.

The home that we sold was also appraised and there was no problem (so I assume it came it at our asking price). The lender in that case was a smaller local mortgage company and I wonder if that might have had something to do with it. That appraiser was very familiar with the local market and he was very surprised when we recounted to him our low appraisal story on the home we have just purchased - in other words, he backed up our thoughts that the asking price was fair and that it should actually have appraised at or above asking.

Very different to the last time we purchased real estate pre global financial too big to fail meltdown!