The link below leads to a Yahoo News article highlighting a recent trend where real estate deals are compromised or killed by appraisals that are coming in lower than the agreed upon contract price.
What the article does not explain in enough detail is that in many markets (including here locally in Sonoma and Napa counties) the percentage of distressed sales (foreclosures or "short sale" properties) exceeds 50%. In cases such as these, the appraisal opinion and analysis should reflect a representative sampling of sold comparables. If half of the market's sales are distressed properties, it stands to reason that half of the sales used in the appraisal analysis should be distressed properties in order to properly reflect the market.
Do not hesitate to call or write with any questions. Here is the link:
http://news.yahoo.com/s/ap/20100103/ap_on_bi_ge/us_home_prices_appraisals