After a six-month search, Alan Wilson, a 38-year-old IT auditor, thought he'd found the perfect house in Federal Way. The 1980s home was on a lake near a green belt and had a large lot with a sports court perfect for his sons.

So in April, he made a full-price offer for $319,500 on the house, using a zero-down Veterans Affairs loan.

The home's inspection didn't yield any deal-scuttling details, and he and his agent persuaded the seller to make a few minor repairs as part of the transaction.

To Wilson, who has bought homes four times before, it all looked like smooth sailing — until the appraisal.

Wilson learned that the home was worth only $292,000. The seller wasn't willing to drop the home's price to $292,000, a requirement for Wilson to get his loan approved.

And though Wilson says he'd fallen in love with the place, he wasn't so enamored that he was willing to bring extra cash to the table to keep his loan total below $292,000, in effect overpaying for the property. The adage is that a home's value is worth whatever a buyer is willing to pay for it.

But these days, the new version might be that a home's value is worth whatever an appraiser says it is.

In a housing market where home prices are still seeking a new normal and financial changes stemming from the Dodd-Frank Act are slowly unfurling, appraisals once seen as homebuying formalities have a seemingly newfound power to stop deals in their tracks.

National and local issue

Nationally, appraisal disparities are causing problems with closings. Last year, 10 to 12 percent of all National Association of Realtors (NAR) members had at least one appraisal value come in below a home's agreed-upon sale price, and more than 10 percent reported that appraisal issues led to deal delays as buyers and sellers renegotiated transaction pricing.

Appraisal procedures, along with strict lending guidelines, are among two of the biggest impediments to resuscitating the housing market, according to NAR spokesman Walt Molony.

"We've never had a similar period in history where appraisals don't support home prices," Molony said. "It's not uncommon for a newly built home to be appraised for less than it cost the builder to put it up."

The Northwest Multiple Listing Service doesn't track home sales that fall apart due to appraisal issues. Anecdotally, though, the problem is out there.

Patrick Ryan, a John L. Scott agent who also has appraisal credentials, says the incidence of appraisals coming in below the agreed-upon transaction price has accelerated since 2008.

"I'll bet a quarter of what I appraise doesn't go through," Ryan said.

Lori Bakken, the Redfin agent who worked with Wilson on his offer, said appraisals are complicating deals. She said about 10 percent of her deals in South King County have failed to close because of appraisal disparities that buyer and seller couldn't resolve.

"I've had two deals fail recently and a third that would've if the buyer hadn't offered the seller more," Bakken says.

Richard Eastern, an agent with Windermere Bellevue West who focuses on short sales, says distressed properties present transaction challenges around appraisals. If a property has two mortgages on it — such as a regular mortgage and a second mortgage or home equity line of credit — and it's listed as a short sale, the two lenders involved may want two appraisals when an offer surfaces. Often these appraisals differ.

Eastern said a recent short-sale listing of his in White Center was appraised at both $275,000 and $325,000.

A Duvall listing of his was priced by the seller's lender at $360,000, but Eastern had an additional appraisal done to show the lender that $360,000 seemed high. The appraiser he hired said the home was worth $308,000 — more in line with the $300,000 offer.

The bank, however, insisted the buyer bring $8,000 more to the table, and the buyer walked. The latest offer on the property is for only $245,000.

"The bank quibbled with a buyer over $8,000," Eastern says. "The broken piece of the valuation process is that banks and appraiser don't factor in a property's history, its trail of gradual price drops or how long it's been on the market."

Tough job

Richard Hager, an appraiser with Mercer Island-based American Home Appraisals who teaches continuing-education courses in the field, told a group of appraisers in late March that they need to familiarize themselves with strict new rules on "appraiser independence" that are part of the Dodd-Frank Act.

Parties that coerce appraisers to deliver particular home values face steep penalties, as do any appraisers who allow such coercion. Under the new rules, steep fines and sanctions can await all participants in the process.

While the news may be good for buyers, protecting them from overpaying for homes worth less than their list price, it means a field that's grown tough in recent years will remain tough for the foreseeable future.

Of 3,200 appraisers in the state, Hager says, 500 have left the field in the past two to three years.

"My guess is that 20 percent to 30 percent of appraisers won't be in their jobs a year from now," Hager says.

That's partly because the pay has dropped and partly because the regulatory environment around their profession has grown tougher.

The profession, which can pay as much as $100,000 annually, now pays more like $50,000 to $60,000. That's partly because in recent years lenders' creation of in-house appraisal-project managers, known as "AMCs," charged fees to arrange appraisals, then paid appraisers they hired at rates amounting to half the price usually charged for the work.

That practice should end as financial overhauls make their way through the market.

Wilson can joke that in retrospect, there were omens about the Federal Way house that slipped out of reach. He found the home on April Fool's Day and made an offer that would close about six weeks later on a Friday the 13th.

The new rules around appraisals may be the ultimate omen — of a landscape where appraisal is not just a formality but, once again, an important reality check about home pricing. Like it used to be.

"I have a lot of respect for appraisers," Wilson says. "That initial appraisal protected me from buying a home whose price was grossly overvalued."

Jane Hodges is a Seattle-based freelance writer.