Comps Are Critical
Interestingly, the whole point of an appraisal isn't to calculate an objective value for the home based solely on its size and amenities, but to compare it to other homes in the area that were recently sold. For an appraiser to determine a home's fair market value, he or she needs an up-to-the-minute understanding of the local real estate market.
The appraisal report includes space for three "comparable sales," known in real estate parlance as "comps." The appraiser will use real estate databases like the MLS (Multiple Listing Services) and other public records to search for recently sold homes that are the closest match to the property in terms of its geographic location, its size, age, condition, view and so on. Generally, these will be houses in the same neighborhood as the one being offered for sale.
For a comp to be accurate and useful, it must be recent. Again, if a real estate agent wants to ensure that the seller gets the best appraiser, he or she will provide the appraiser with a list of up-to-date comps that come in at or above the asking price.