08/21/2026
WHEN TWO APPRAISALS DON’T MATCH REALITY: A REAL MEMPHIS REAL ESTATE STORY
Here’s a real-world example of why comparable sales and local market knowledge matter so much in a real estate appraisal.
We own two houses literally next door to each other. The homes have essentially the same footprint and were renovated in the same fashion, at the same time, to the same standard. The primary difference is that one has a two-car garage, massive storage space above the garage, and additional finished attic space. The ceiling height prevents that upstairs area from technically counting as livable square footage, but it is still very real, functional space.
We originally had the house with the garage under contract for approximately $275,000.
During the appraisal process, the appraiser asked us, as the agents, to provide comparable sales BEFORE they even attempted their appraisal. We provided what we believed were strong, relevant comps. Ultimately, different properties were selected, including homes farther away that we felt were less comparable.
That appraisal came back at $231,000, and the deal ultimately fell apart.
The same buyer then purchased the house directly next door for $255,000. That house does NOT have the two-car garage or the additional upstairs finished and storage space.
And to be perfectly clear, this wasn't a related-party sale, sweetheart deal, investor transfer, or anything else unusual. It was a legitimate third-party, arm's-length transaction between an independent buyer and seller, with nothing weird or abnormal influencing the purchase price.
The property appraised at value and closed at $255,000.
Fast forward just a few weeks.
We refinanced the original house with the garage. A completely different appraiser came out and completed another appraisal.
Appraised value: $220,000.
Now it gets interesting.
The nearly identical house literally next door had just sold for $255,000 within the previous month.
Same basic footprint.
Same immediate location.
Same renovation quality.
Same ownership and renovation approach.
Except the house being appraised has the additional two-car garage and finished/storage space.
Yet that $255,000 arm's-length sale wasn't included in the appraisal analysis, apparently because it was an off-market transaction and wasn't listed in the MLS.
So within a relatively short period, we have:
Appraisal #1: $231,000
Appraisal #2: $220,000
Actual arm's-length sale next door: $255,000
That's a $35,000 difference between the latest appraisal and what an independent third-party buyer actually paid for an extremely similar property sitting just feet away that has less features.
This isn't about attacking any individual appraiser. Appraisals are professional opinions of value, and different professionals can reasonably reach different conclusions.
But at some point, you have to look at what the actual market is telling you.
A willing third-party buyer paid $255,000.
The transaction closed.
The property is next door.
The homes are extremely similar.
And the higher-value property has a two-car garage and additional finished/storage space.
Yet somehow the conclusion is $220,000.
Interesting.
MLS data is incredibly valuable, but not every legitimate real estate transaction happens through the MLS. Off-market sales, private transactions, renovations, property condition, buyer activity, and differences from one street to another all matter.
That's also why having an experienced local real estate agent who actually knows the market can be invaluable. An active agent may know about transactions and market activity that never show up in a simple MLS search.
Sometimes the best comparable isn't three streets away.
Sometimes it's literally next door.
And sometimes, despite what the “experts” may tell you, the person actually working in that neighborhood, negotiating with buyers, seeing the properties, and watching transactions happen in real time might know a little more about the market than the numbers on a report suggest.
Sometimes your agent knows more than the “experts.” So make sure you pick the right one.
https://www.realtor.com/realestateandhomes-detail/1145-Tanglewood-St_Memphis_TN_38114_M78137-26164
Memphis Prime Properties
Professionals Make the Difference.
Michael Valenza
Brokered by eXp Realty, LLC
📞 Cell: 901-335-7878
☎️ Office: 888-519-5113 ext. 679
✉️ [email protected]
🌐 MemphisPrimeProperties.com
For Sale: View 20 photos for 1145 Tanglewood St, this 3 bed, 2 bath, 2000 sqft. single family home in Memphis, TN listed at $259,000. MLS #10222004
