What does the term appraisal red flags refer to?

The term appraisal red flags refers to indicators that might suggest potential issues with an appraisal’s accuracy or objectivity. These red flags are crucial in the appraisal process as they can highlight concerns that may need further investigation to ensure the final value is reliable and valid.

For instance, significant discrepancies between the appraised value and similar properties in the area, unusual adjustments made to the comparable sales data, or potential conflicts of interest involving the appraiser can all serve as red flags. Identifying these issues early helps maintain the integrity of the appraisal process and supports more accurate property valuations.

Other options address unrelated concepts, such as physical markers on maps, market levels, or signals in auctions, but they do not pertain to the nuances of appraisal practice and the importance of recognizing potential issues that could undermine appraisal credibility.