Having an appraisal done to determine market value is an effective tool to prevent buying a property worth more than it is worth. Along with a few other tricks, appraisals can also be used as an effective negotiation strategy to purchase a house for less than it is worth.
Appraisals are a very subjective practice. This means that all interpretations, while based on a certain set of procedures and regulations, are still ultimately determine by what one person thinks. Many factors go into determining market value. Some of which are in your control and others are not.
Things that are in your power are items such as how new your kitchen is, bathrooms, any remodeling or updating that you have done in the house. Things that are beyond your control are things like what neighborhood the property is in, other properties that are in the neighborhood and the medium income of the area that the property is in.
While we, as humans, assign intrinsic value to items, property appraisers determine the true value of a property using the above standards as their guidelines. Again keeping in mind that we are humans, the process of determining market value can be influenced by asking the right questions and pointing out particular aspects of the property that might be missed by the appraiser.
I have successfully increased the appraised value of a property by calling the property appraiser and asking "What can be done to increase the value of this property?" I also asked what items of the property brought down the value when they were determining the market value of the property and ask how can I fix or change them to boost the value. By plainly asking for more you can generally get more. It's as simple as that.
One thing that I have found to be true with all property appraisers though is that they do not like to give out the value of the property after inspecting the home. I later established that this was to avoid any quarrel with the property owner. But I also found that if I was there for the appraisal and was very cordial that when I called them back after they left that my chances of getting the value increased where much greater than if I simply overlooked them and let them do the appraisal.
As with anything it is all about networking and being pleasant. That is the biggest factor that you have control of when an appraiser is determining market value. Investing in real estate can create financial freedom and one of the major factors that determines whether or not you are going to cash a big check or a little check all falls down to how you engage with one person that needs to make a subjective judgment. That is why I recommend that you are very FRIENDLY with this person.
All in all, determining market value is a very easy task with or without an appraiser. The bottom line when investing in real estate is both buying the property at the right price as well as selling the property at the right price. Spending some money up front to ensure that you will make more later on is a no-brainer in my book.