But then a call from his Realtor delivered the bad news.

An appraiser employed by the buyer's mortgage company said the property was worth only $170,000.

The appraiser wouldn't budge on his estimate of the home's value. So Hansen ordered another appraisal from a different company. It came back higher, but still about $9,000 less than the buyer was willing to pay.

To make matters worse, the buyer backed out after the second appraisal.

"I had no idea that the appraisal would even be a problem," said Hansen, who is moving out of state. "If someone is willing to pay $209,900, shouldn't the house be appraised at that price?"

In a word, no.

But more sellers are finding themselves asking that question as the housing market along the Wasatch Front - especially in Salt Lake County - heats up.

Home values are escalating, especially in some of the Salt Lake area's most desirable neighborhoods. Buyers, worried about future price jumps, increasingly are making full-price or above full-price offers on properties within days - or even hours - of them being offered for sale.

But appraisers aren't always coming up with values that support those full-price or above full-price offers.

Therein lies the problem. A buyer who agrees to pay $310,000 for a home that appraises for only $290,000 can ask the seller to part with the property at that price. Or they can walk away from the deal.

But if a buyer really wants a house and the seller isn't willing to cave on the selling price, the buyer must pay the $20,000 difference in cash - on top of money already required for a down payment and closing costs.

Realtor Jason Weidenbenner, who represented Hansen, says such scenarios are a growing problem. He thinks appraisers are too conservative these days, to the detriment of sellers.

"Appraisers are scared," he said, referring to a state crackdown on the appraisal industry in recent years. "You need to take into account the high appreciation we're seeing when setting value, and I don't think some appraisers are doing that."

Real estate agent Jeff Campbell also said he has seen appraisals coming in lower than what buyers are willing to pay. He figured the problem stems from appraisers' reliance on past sales. "They don't always provide an accurate idea of what a property is worth," he said.

While some are concerned today that appraisals are too low, just a few years ago the worry among many - including state regulators - was that appraisals were too high.

Five years ago, with prompting by the federal government, the state instituted tougher educational and experience requirements for appraisers and went after those inflating property values for their own gain. Some were in collusion with unscrupulous real estate agents or others involved in home-sale deals. Still others inflated appraisals to get more business.

In any case, the crackdown was largely responsible for the number of licensed appraisers in Utah plummeting. After peaking at 2,200 in 1999, the number of licensed appraisers in the state fell to about 1,800 in 2000 and remained at just less than 1,000 in 2001, 2002 and 2003. Today, there are about 1,150 licensed appraisers working in Utah.

Derek Miller, director of Utah's Division of Real Estate, said he understands the frustration of sellers and real estate agents when appraisals are lower than what a buyer is willing to pay.

"This is a typical problem in areas with a hot housing market," he said. "Demand is driving up what people are willing to pay. [But] what someone is willing to pay is not necessarily what the property is worth from an appraiser's standpoint. Appraisers look at more than just what people are willing to pay."

Appraiser Lynn N. Christensen said he and colleagues rely heavily on sales of comparable properties, but can adjust values upward in times of rapidly escalating home prices.

He doesn't think appraisers are too conservative. He thinks they simply are doing their jobs and, sometimes, saving people from spending too much on a home and lenders from financing a property destined for foreclosure because the buyer paid too much.

"The buyer has a vested interest [in a home selling], the Realtor has a vested interest, the seller has a vested interest and we're an unbiased third party," he said.

He said appraisers are a key component in the fight against mortgage fraud and foreclosures, two areas in which Utah leads many other states.

Consumers, of course, can order another appraisal if they believe the first one ordered on a property was too low. But as Hansen learned, it doesn't always get them the value they need to pocket what a buyer offers.

In Hansen's case, when the buyer bailed after the second appraisal came in less than that amount, he decided not to pay for a third appraisal just on the hope it was higher. Hansen ended up re-listing his house at $201,000 - the amount of the second appraisal. He got a full-price offer within one day.

He remains angry about having to forfeit about $9,000.

"I never did get a good answer as to why the house wouldn't appraise at $209,900," he said. "And I don't think I ever will."

Appraiser Deborah W. Coburn, president of the Utah chapter of the Appraisal Institute, said consumers can always can get another opinion if they don't agree with an appraisal done on property they own or want to buy. But ordering another appraisal is going to cost an additional $350 and $400 - and there is good chance it may set a value close to the first appraisal.

Sellers and buyers also can renegotiate the selling price based on the first - or subsequent appraisal.

And if buyers have cash available, they can simply put in enough money to cover the difference between the appraisal amount and the offer.

lesley@sltrib.com

What can you do if you don't agree with an appraisal?