One Property, Two Prices: Why Appraisal Values Diverge

  • February 18, 2026

In a perfect (real estate) world, when two appraisers are engaged to value the same property, those two individuals should arrive at the same valuation within an accepted (and relatively small) differential. However, there are situations where two appraisers derive different values for a single asset. How does this variance happen and which appraisal should you rely on? And perhaps more importantly, who should be valuing your property in the first place?

Often it comes down to one of two factors: the first is where one individual is a certified general real estate appraiser (Appraiser) and the “other” real estate professional is not; and the second is that there are Appraisers who adhere to the performance standards and guidelines of the Uniform Standards of Professional Appraisal Practice (USPAP®)1 and the appraisal body of knowledge, while other Appraisers and non-real estate appraisers or “other” real estate professionals do not. This often creates cascading problems with the valuation so that even two certified Appraisers may not always derive the same valuation.

Who Qualifies as an Appraiser?

Licensed and certified general real estate appraisers go through rigorous education and training and must sit for and pass a statewide appraisal exam. Appraisers’ valuation careers often continue with advanced appraisal course work with many earning real estate valuation designations such as the Appraisal Institute’s MAI designation.2

Appraisers should follow the appraisal process when opining to value and refer often to peer-reviewed scholarly documents, relevant industry reference materials and thought leadership pieces (“appraisal body of knowledge”). This process ensures that Appraisers’ concluded opinions were not developed simply as the result of “professional judgment,” which is not recognized within accepted appraisal practice.

USPAP: Appraisers’ Framework for Credible and Defensible Appraisals

USPAP is a set of generally recognized ethical and performance standards and guidelines for the appraisal profession in the United States. Its purpose is to promote and maintain a high level of public trust in appraisal practice by establishing requirements for appraisers, the foremost of which is that they follow concrete appraisal and valuation processes when opining to value to reach an objective, meaningful conclusion. Compliance with USPAP is required for appraisers.

Consistent adherence to USPAP’s performance standards ensures that appraisals by licensed professionals can be trusted by clients, legal entities and financial institutions (which will not accept an opinion by anyone other than appraisers); it also affirms that the Appraiser is well trained, knowledgeable and committed to the highest standard of the appraisal profession.

How Divergent Values Originate

As noted, Appraisers who comply with USPAP standards and the appraisal body of knowledge should generally reach similar conclusions within an accepted, relatively small differential. Divergent values typically originate when the appraisal process is not followed, starting at the top with problem identification and failure to identify accurately the following six criteria:

Identification of the Problem
Identify the client and intended users Identify the intended use Identify the type and definition of value Identify the effective date of the opinion Identify the relevant characteristics of the property Identify any assignment conditions

Source: Appraisal Institute, The Appraisal of Real Estate (15th ed. 2020); Figure 4.1 The Components of the Valuation Process

Incorrect Problem Identification

When done right, property valuation is an objective process built on six foundational factors that inform what the appraiser is solving for, as described above in the problem identification grid. It is based strictly on the facts, with an appraisal process that follows accepted real estate valuation methodologies relevant to the asset, supported by market data and peer-reviewed and scholarly industry documentation.

Incorrect problem identification is ground zero for valuation discrepancies and directly leads to an inappropriate scope of work. This is important because the scope of work enables development of credible opinions and conclusions about how each “condition” in the market value definition used in the appraisal is addressed.

Failures in problem identification also open the door to inaccurate or unrecognized methodology based on subjective “professional judgment.”

It is imperative that the appraiser correctly identify:3

  • The client who commissioned the appraisal and the intended users of the report (owner, investor, lender)
  • The intended use of the report
  • The type and definition (premise) of value associated with it — for example, market value versus investment value will often have divergent values
  • The effective date of the opinion — if appraisers are using different dates, they will likely refer to disparate market data and conditions to arrive at their opinion of value
  • The relevant characteristics of the property — this will affect the methodology used to arrive at the valuation
  • Assignment conditions — the rules, facts or circumstances that affect the appraisal’s scope of work

These factors each contain a series of often complex steps and provisions that the appraiser must address as part of a comprehensive appraisal process. When two appraisers are opining to value on the same property but their problem identification does not align, values can and often diverge dramatically.

Two Certified Appraisers, Two Different Valuations

However, even two certified Appraisers may not always derive the same valuation.

For instance, there are Appraisers who may inadvertently violate USPAP guidelines and the appraisal body of knowledge for an assignment, which often results in unreliable valuations. This is typically not because Appraisers intend to mislead, but rather due to lack of experience and knowledge. Other Appraisers may give in to client pressure and perform more “off the path” valuation techniques that will lead to divergent real estate values from those of Appraisers who conduct their work “by the book,” requiring an Appraiser to “perform assignments with impartiality, objectivity, and independence, and without accommodation of personal interests.”4

Values also diverge when Appraisers conclude to unsupported assumptions and lack market-support data for those assumptions and conclusions. Given that Appraisers should have access to the same data, professional resources, and are tasked with following accepted methodologies relevant to the asset, this scenario should not occur when both professionals adhere to USPAP and the appraisal body of knowledge. Therefore, it is crucial that property owners, investors and lenders understand the basics of the process performed by Appraisers before commissioning a valuation.

Footnotes:

1: The Appraisal Foundation, Uniform Standards of Professional Appraisal Practice (USPAP®) (2024).

2: Appraisal Institute, MAI Designation, https://www.appraisalinstitute.org/why-join/pursue-a-designation/mai-designation.

3: Appraisal Institute, The Appraisal of Real Estate 43 (15th ed. 2020).

4: The Appraisal Foundation, USPAP 22 (2024).

Related Insights

Related Information

Published

February 18, 2026

temp Key Contacts

Mark Dunec

Senior Managing Director, Co-Leader of Real Estate Valuation Services

Most Popular Insights

  1. Beyond Cost Metrics: Recognizing the True Value of Nuclear Energy
  2. Finally, Pundits Are Talking About Rising Consumer Loan Delinquencies
  3. A New Era of Medicaid Reform
  4. Turning Vision and Strategy Into Action: The Role of Operating Model Design
  5. The Hidden Risk for Data Centers That No One is Talking About

Sign up to get access to FTI Consulting Insights

Subscribe