An appraisal is an opinion of value at the time of sale and assists in determining if a lender will loan on that property.  There is no protection other than for the lending institution.  The appraisal might not even protect the lender in the case of a declining market.  There are many variables that can affect the value and it is an ever moving target.  

It is for the benefit of the lender/investor so the loan can be sold. A homeowner doesn't get protection other than knowing it is worth what they are paying.

the only protections are for the lending institutions......

## It protects the Lender, in case the mortgagor defaults. 

The others have  answered.

It is a opinion of value, but not always right.

Appraisals are an opinion of value. Most times they are on point. I have seen some that were absurd, especially on multifamily properties.

By knowing what they are doing.

Simply put to make sure the value is at least what the purcase price is. The bank does not want to give a mortgage if the home is worth less

They protect the lenders - to a certain extent.

And what Kenneth J. Jones said...

Lenders do not want to over lend.

They don't. An appraisal is just an estimate of value, useful for lenders to determine the risk of the loan but no real protection.

Minnette Olsen - well, the home owners get to know the market value of their home...

They usually don't protect anyone.  Almost all of them come in right at the contract price. 

I agree with Barbara Todaro (for about the 3rd time in a week)

By providing a valuation

It gives a much clearer value of a property than just guessing

Minnette Olsen An appraisal doesn't protect anyone. It provides the value on which a loan is based.

NO.

They just give a snapshot of one persons opinion of value at one moment of time, and all will be careful to make it known that this is not a warranty.

Lenders want to make sure the loan is less than the property value if it is not insured with the gov't. 

It creates a contingency in the contract, that's it.

Kenneth J. Jones gave a very good answer.  That said, though, appraisals tend to be more valuable to out-of market buyers who are not familiar with local values.  Someone from California, for example, may think a property is an amazing buy in my market when, in fact, it is overpriced for current conditions.  

An appraisal is intended to protect the lender and the buyers but, in reality, it does neither.  

If they are done with care, it levels the playing fields via value transparency

In my opinion, the appraisal and the appraisal process pretty much only protect the lender. There's a "story"/angle that talks about protecting the consumer/public but I don't by it.