Lenders generally request an appraisal prior to the funding of any mortgage. An appraisal may assist in production of a fair contract price. The actual appraisal report defines the results. While it might be true that an appraisal can help deter over priced property it might also prevent one from selling a property below current value.
The Cost Approach determines the replacement cost of the land and improvements at today's value.
The Income Approach measures the income potential of the subject property.
The Sales Approach is the most widely used in estimating property value.