While the market is showing great signs of improvement, appraisals are proving late to catch up with the market value of the properties. It has become more and more common to see appraisers denying obvious increases in real estate values. According to the National Association of Realtors, 33% percent of polled realtors faced appraisal issues only during the month of May 2012. Let's quickly go over the appraisal process for those of you who are beginners in the real estate world. Let's say you find your dream home but you don’t have the financial means to pay it all in cash. Your next step is to contact your bank for a little help. They review your credit score, your employment records and they give you the terms for the loan such as a minimum down payment, the interest rate of the loan, the points…If you both agree on the conditions, the next step is that you give them your executed purchase contract. From there they send an appraiser to your dream home to check its value. The problem is that if the appraisal delivered is below the agreed contract price, it siginifcantly endangers the deal. The bank will only lend you up to the appraisal price. Often, this forces the buyer to review his/her down payment or to renegotiate the sale price. On the other hand, you can easily understand that this upsets the seller who was already planning his vacation to the Caribbean islands. What is the reason behind these conservative appraisals? We’ve heard that it happens very often because appraisers are not locals and may ignore the most recent neighborhood appreciation trends. However, you might be amazed to learn that this is not the most common reason. It seems that appraisers are actually scared to report rising values to the reviewers of the appraisal management companies which employ them. They fear criticism of overvaluing your dream home because it would expose them to future litigation with the secondary market. To conclude, my advice is to have your realtor meet with the appraiser to make sure he is aware of any useful data on any equivalent closed or pending sales. That information should clearly show recent market changes and lead to (hopefully) a better appraisal. This guest post was written by Daniela Pellicciotti from Condoideas Realty Group.