The One Thing That’s Most Often Overlooked by Appraisers

We recently asked our appraisal community, “What’s the ONE thing that is most often overlooked by appraisers?” We received a wide variety of answers ranging from big-picture oversights to specific details. The most common answer we received was “Highest and Best Use.” However, many real estate appraisers had other opinions regarding the most commonly overlooked item in an appraisal. Read their answers below.

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What’s the ONE thing that is most often overlooked by appraisers?

Highest and Best Use (HBU)

This was the top answer, which was written in by about 8% of survey respondents.

“First question when doing an appraisal is the highest and best use. If there are two very different opinions of value on a property, different HBU is often the reason.”


A few different respondents said that the most common oversight is failure to obtain accurate measurements of the subject property.

“Actually physically measuring home – I do a fair amount of expert witness work and find that many of the cases are the result of the appraiser assuming that the sketch found on property appraiser site is accurate. These can often be incorrect and open the appraiser up for undue liability due to a lack of measuring.”

“Accurate living area calculation – It is my understanding that many appraisers utilize 3rd party (tax records, etc.) sources which are very often wrong and do not physically measure the improvements.”

“Taking true measurements of the subject property – Keep in mind that being lackadaisical about measuring the subject property can lead to unreliable results…. Always measure the subject, and do not use a laser.”

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Obsolescence is another item mentioned by multiple survey respondents. Appraisers cited both external obsolescence and functional obsolescence as being frequently overlooked.

“External obsolescence for the subject property – When I’m reviewing appraisals, I see this more often than other oversights. When I was performing retrospective reviews for FNMA, their biggest complaint was that appraisers did not point out external obsolescence for the subject and/or its impact on marketability (if there was an impact).”

“Functional obsolescence – Appraiser focus has changed over the years as subject functionality has changed.”

Oversights related to certain areas of the home

Several appraisers noted specific areas of the home that are often overlooked by appraisers:

  • “Kitchens”
  • “Basements”
  • “Remembering to do attic inspections!”
  • “Attic Insulation”
  • “Condition of the crawlspace”
  • “Outdoor entertainment”
  • “Outbuildings”
  • “Septic systems”
  • “Foundation integrity”
  • “Landscaping”

“Kitchens – Since there isn’t a lot of room on forms, they often get overlooked and not researched enough.”

“I believe the most often overlooked item by appraisers Is confirming the legal use of finished area in the basement level of dwellings.”

“Most appraisers just look at the immediate main house improvements and overlook sheds, gazebos, built in hot tubs in pools, expensive landscaping and fencing.”

Oversights related to comparable sales

A handful of survey respondents mentioned various aspects of comparable sales as being commonly overlooked by appraisers:

  • “Prior sales/transfers of comparable sales used”
  • “Sales history of comparables”
  • “Differences in neighborhood values”
  • “One often-overlooked item is the age of the comparable house.”
  • “In CA, likely the ownership or contribution of solar at comparable properties.”

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Oversights related to costs and adjustments

Some appraisers described common mistakes related to costs and adjustments:

“Using arbitrary costs instead of specific cost details – In our area (South Walton) construction cost fluctuates drastically from builder to builder and community to community.”

“Forgetting to revise base costs, like the cost per square foot for tall ceilings – It’s easy to overlook such details because they are not always at the forefront of our observations or analysis. They can affect value in tremendous ways.”

“Support for an explanation of adjustments and/or lack thereof – Canned or prefilled statements are typically too general and do not specifically address the subject property and its unique characteristics.”

“Breaking out location, site size, view and waterfront footage adjustments versus just applying a lump sum.”

Big-picture oversights

Several appraisers cited general topics or big-picture aspects of an appraisal as being the most commonly overlooked:

  • External influences
  • Location
  • Sales history
  • Floor plan flaws
  • Improvements
  • Depreciation
  • End user
  • Quality of data
  • Getting a second confirmation of data
  • Market conditions
  • Adverse conditions
  • Condition
  • Amenities
  • View
  • Reconciliation
  • Competency
  • Lack of business acumen

“External Influences – Because you are so focused on the subject property, sometimes there are other influences not noticed.”

“Location – Often times, our insight of a subject’s neighborhood can get glamorized by our emotions. In contrast we miss the obsolescence across the street.”

“Condition – It’s easier to calculate the overall big picture than to focus on a hundred dollars here and a hundred dollars there of borderline-unnecessary upgrades or repairs.”

“Reconciliation of each approach to value and then the final overall reconciliation – Too often I see appraisals where a value is picked but nothing is discussed.”

“Market conditions are often overlooked and not analyzed well. Clicking on the checkboxes in the Neighborhood section of the appraisal form and Form 1004MC do not provide sufficient analysis for the reader to fully understand the subject’s market area and impact on the subject property itself. A more detailed analysis with additional support from various resources available can provide readers with more insight. Every single appraisal report is a reflection of the appraiser’s overall work ethic and quality of work.”

Commonly-overlooked details

Other appraisers gave very specific answers about details that they believe are most often overlooked by appraisers:

  • The type of flooring when it looks like hardwood
  • The water rights on an agricultural property
  • The value difference between LP gas and Natural Gas in rural areas
  • Zoning code – the correct predominate percentages
  • Zoning description
  • View photos taken from inside the house
  • A picture of the property address and street name
  • A picture of the CO2/smoke alarm
  • Obtaining all photos
  • Days on Market (DOM)
  • Errors in reports such as spelling
  • Amount of sunlight inside dwelling
  • FF&E in apartments
  • Current business phone number
  • Private road agreements
  • Supply concerns given the marketing time requirements for corporate clients when completing relocation appraisals
  • Explaining more about the subject sale
  • General lack of detail (e.g., in describing the property)
  • General lack of attention to detail

“I do a significant number of reviews and in this fast paced world of deadlines and templates, many appraisers look, but don’t see. […] As a high volume office, we have to build templates in order to keep up with deadlines, but a critical error, is that one template doesn’t fit all. […] Many appraisers get wrapped up into boiler plate comments and do not read what they actually put into the appraisal. When the review is completed, I find a significant number of comments discussing a totally different property and in a totally different location or area that has nothing to do with the subject in the appraisal. What is needed? Walk away from the report; get a cup of coffee or drink; wait a few minutes and then sit back down and read the report line by line and word for word. You will have less call backs asking for revisions and/or questions.”

“As a review appraiser, I find errors when appraisers use skydata to get the subject property’s legal description and current years taxes. This information is usually 2 to 3 years old and abbreviated. The appraiser doesn’t seem to do a double check to verify for accurate information.”

“Accuracy in describing the subject property. Is there deferred maintenance, external obsolescence, what are the improvements in the last 15 years if the subject property is a C3 condition, is the subject property on private well and septic, are utilities on and functioning…”

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