Not sure that this is actually a legal question, but I figure that someone on here should be able to answer it.

I'm currently getting a property I'm buying appraised. I understand the idea... the bank wants to know that the collateral they are getting for their loan is actually worth the amount that they are loaning. But how does an appraiser actually appraise a house? I've been told over and over that a house is worth exactly what someone will pay for it, and with the way housing prices are going in this area, this house will probably be worth less in a year than it is now (My gamble, obviously, is that at some point in the future it will be worth more than it is now.) So how does the appraiser confirm that the selling price is appropriate?

It is their job to have a good handle on what houses are selling for in your area. They probably related things like average price for a set number of square feet, then they plus or minus the value based on neighborhood and other factors. Before they show up at the house, they have a pretty good idea of the value from that info.

When thy arrive, they look for damage... things that ought to be fixed to make it livable for the average person... and they look for things that would add to the value... finished basement, pool (for some areas), etc. They add up the plus and minus columns and with their initial assessment, they have an appraised value.

There are two inspections, one is the physcial inspection of the property and that looks for issues that can be serioius or lower the value of that property.

But a person going to set the value, will look at several things, in the past what has similar houses in that area that are similar sold for.
They will take photos, and list other similar size and location properies and show what they sold for.

Then they will go and find similar houses that are currently on the market, and list them, this will show what the current asking prices are.

And they will look at homes lately that were removed from the market for varouis reason.

This figure will show what other people have on the average paid for similar homes and what other similar homes are being sold for.

If the home is "different" or a one of a kind, or special, like a home that used to be owned by Johnny Cash perhaps, then their may be a added value.

In answer to your question “How does an appraiser actually appraise a house?” and keeping it as simple as possible…

An appraiser will conduct an exterior and/or interior inspection. This will provide the appraiser with the necessary information to enable him/her to compare your home to homes which have recently sold within your home's marker area. The appraiser will then analyze all of the information gathered which will enable him/her to make the necessary adjustments to compensate for differences between your home and the comparable homes, thereby determining your homes market value.

Also, in most cases a residential mortgage appraisal is designed to establish the value of your home as of the date of inspection. It is not designed to determine future value. In today's market you would need a crystal ball to make that determination.