Location, home features, and market value all play a role in determining what a home is worth. When a buyer and seller agree on a selling price for a home, the buyer must then get a home appraisal done.
Most lenders will require a home appraisal for a mortgage. If a borrower defaults on a loan then the lender is responsible for the property. An accurate home appraisal protects the lender and buyer from paying too high of a price for a home. In some situations however, a home will appraise for less than market value, leaving a seller stumped!