What factors determine a home's value when it is appaised?

Attempting to buy a relative's home ~ but the home & property (5acres) was appraised for $30,000. less than the asking price.

Relative was upset, because the house was appraised 5yrs ago at $10,000. OVER the current appraisal value ~ and that number was for the house alone, didn't include the value of the land it is sitting on.

Although the appraisal is lower than the original asking price, due to circumstances (which are too complicated to go into here) it would have been better for all parties if the appraisal was not so low.

Has anyone had this experience? The realtor stated that part of the problem is that property in this area is not selling well ~ but does that play a huge factor in the value of a home?

Also, the home is older, being sold "as is" & does need some maintenence~ but there are new homes nearby on 1/4 acre lots being sold for 1.5 times the amount this house was just appraised for. Does age/condition of the home matter that much?

Everything matters in the value of a home. Key points impacting value:

The age of the house

Age of the house relitive to other homes in the area

Condition of the house

Flexibility of room usage

General Marketability - if it is a big family neighborhood and this house is not condusive to family life or if families are your primary buyers and the neighborhood is filled with bikers and party animals, etc...

The property - is it usable

The position of the house on the property

Taxes - based on value and size...if your lot is 20X the size of most other lots...

Look of the house - does it fit in the neighborhood

There are so many things that impact the value of a property. If it is only off by 10K, have another apprasial.

Typically the value is established using recent sales price of homes in the area that are similiar in design, sq footage, age, etc. So if not many homes of that type have sold recently, they have less homes to compare prices with. Also, if others in the area with similiar homes accepted a low offer on a house, that effect others in the area trying to sell there house.

Age does matter to a point. If there's a less demand for older homes this drives the price down.

For the record, I own a 1929 house and I love it. It's a pain to work on, but I love the style and craftmanship of a well built home.

There are many things that matter when a house is appraised. A lot of times, appraisors get the price wrong...they are only human. I would look at the condition of the house, bedrooms, bathrooms, sqare footage, acres, and tha area. If you think that you could resell the house for that price or more, then it is a fine deal. If houses aren't selling in that neighborhood, I would rethink this. Talk to som, neighbors and see what they bought their house for or look other neighborhood houses up online. A house in an "as is" state should also have a discount because if anything major goes wrong after the purchase date, you will be responsible.