Once the purchase agreement has been signed around, and the inspection negotiations have been completed or waived, it's time to get the property appraised.  This process is closely tied to the lender.  If you are getting a loan from Mega Bank of the Universe, they will send their own appraiser with instructions to be very conservative in their valuation of the property.  If the lender allows independent appraisers, the appraiser is usually hired by the mortgage broker.  This type of appraisal is more friendly to the transaction.

An independent appraiser will do his best to make the transaction happen.  If he doesn't, the mortgage broker won't hire him again.  Appraisal is not an exact science.  An appraiser has to justify his final price by using comparable sales or active listings.  If there are many properties to choose from, the appraiser can choose the highest values.  This can be especially important if the buyer wants to roll closing costs into the loan, or escalate the value in a competitive bid.

It's easy to get upset when parties to the transaction don't get the value they want from the appraiser.  An appraiser must maintain a good reputation, or lenders will no longer accept his appraisals.  We justify all values with our team appraiser before we write the offer.  We have never lost a transaction due to an appraisal not being able to match the agreed upon price.