How Stuff Works is one of the best websites for credible information. It covers a wide range of subjects and it is done by experts so you know you can trust them. Here is an article on home appraisals.
These take place after a house’s option period has elapsed and the mortgage company wants a third part objective view on the price of the home. It is a protection for you and the lender to ensure you are not getting a raw deal on a property. Sometimes, these can be a real hassle as often the market value of a house moves quickly up or down. If an appraisal does not closely match the offered price on a house, the buyer and seller than have to decide if they want to change the terms of the deal to match the appraisal, or come to a mutual agreement to walk away from the deal.
Also, the buyer will often be the one paying for the appraisal which can run into the hundreds of dollars. Buyers need to be very sure of a home before putting in an offer.