The Appraisal Paradox

The Appraisal Paradox refers to the idea that professional appraisals often highlight a property's flaws to justify a lower valuation, yet buyers tend to focus on its positive aspects and are willing to pay more. In other words, appraisals emphasize negatives, while buyers' perceptions emphasize positives, leading to a disconnect between the appraisal value and the market value. This paradox can create challenges in real estate transactions, as professional assessments may undervalue a property compared to what motivated buyers are willing to pay based on their perception of its worth.