What is it about a bank appraisal that the average person finds so authoritative?

Let's say a homeowner meets with three real estate agents for a price opinion, and all three put the value at about $1 million. But the homeowner just refinanced, and he pulls out an appraisal from ABC Bank valuing his property at $1.3 million.

He believes the agents are wrong, and the bank is right -- and not just because the bank's number is higher. After all, what the Realtors say is just their opinion. A bank appraisal is official. Right?

Not necessarily.

Banks and other lenders order property appraisals for one of several reasons.

First, if you're buying a home and apply for a mortgage, the lender orders an appraisal to validate the purchase price before approving your mortgage.

Second, lenders do the same for refinancing and for the same reason.

Third, if you apply for a home-equity line of credit, the lender will order an appraisal to determine exactly what your equity is -- the value of the property minus outstanding mortgages.

Appraisals are also used in divorce and estate settlements.

There are good reasons why an appraisal may seem more official than an agent's opinion. First, appraisers are licensed in this specialty area. Second, appraisals are more quantitative than the comparative market analysis that agents provide. Whereas a CMA is a "soft" analysis -- based on qualitative comparison to recently-sold properties -- an appraisal is more mathematical, with specific dollar deductions from a home's value for deficiencies versus recently sold properties, and additions for aspects that are superior.

Despite the public's reverence for appraisals, my experience is they're not all they're cracked up to be. Here are some examples.

1. Comparables not appropriate: A client to whom I sold a house a few years ago called me in a panic because an appraisal done for a home equity line valued his house very low. When I looked at the appraisal, the comparables used to value his house were not appropriate. A big-name bank appraised his property at least $200,000 lower than its current market value.

2. Lacking local knowledge: A friend had a similar experience with another big-name bank. This time valuation was low by about $300,000, based on comps selected by an appraiser who did not know our local market. It was only after I sent her to a mortgage broker who uses an appraiser with local market expertise that her house was fairly valued.

3. Restrictions missed: A homeowner with land in Greens Farms was confident her property was worth $2 million, based on a recent bank appraisal. When I looked at it, I could not agree -- and neither could any builders. Although it was a lovely, well-located parcel, it had wetlands which limited its use. Also, the land was subject to 2-acre setbacks, even though it was only 1.6 acres, so its future use was even more limited -- and its value further reduced. The appraisal did not address either of these issues. Imagine how the owner felt when she sold her property for $1 million less than the bank appraisal led her to believe it was worth.

4. Lacks appraisal tools: An appraiser from Rhode Island sent here to value a local property stopped in at my office. She asked for help identifying comps. She admitted that she never appraised a property here before, that she was unfamiliar with our local market, and that she did not have access to our multiple listing service. I pitied the poor property owners whose lender arranged for Out-of-Town Sally to value their house, because there's no way she could possibly do so.

Appraisals are serious business. They are used to make decisions involving large amounts of money. But many are not worth the paper they're printed on.

There are really good appraisers out there. And, as the preceding examples show, there are some really bad ones. It's hard to know what you're getting.

The moral of this story is not to put too much stock into appraisals. If they serve your purpose, fine. But if those three Realtors from the anecdote at the beginning of this column disagree with your appraisal, I think you would be wiser to listen to them instead.

Evi Coghlan's "The Real Deal" appears every other Friday. She is a licensed real estate agent with the Riverside Avenue office of Coldwell Banker and a former marketing consultant to Fortune 100 companies. She may be reached at 203-247-6691, by emailing her at evi@evicoghlan.com, or visiting www.evicoghlan.com.