NEW YORK (MONEY Magazine) - Appraisers are supposed to be the referees of the home-buying process. Their job -- to provide an independent estimate of the value of a property -- protects the bank by guaranteeing that the brick-and-mortar collateral for the mortgage is appropriately valued.

Plus, a wise appraisal helps ensure that you haven't been lured into overpaying for your dream house -- or refinancing it into pipe-dream territory.

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But the system isn't working so well these days. As the mortgage biz becomes more competitive, lenders have sought ways to cut costs -- and appraiser fees (currently around $300 a pop) have proved highly choppable.

The lowest bidder often wins the job but takes shortcuts to get it done, like skimping on realty association memberships that offer access to the most current sales data, says Jeffrey Jackson of New York City appraisal firm Mitchell Maxwell & Jackson.

"Legitimately made transactions can be appraised too low because appraisers have old data," he warns.

Worse: growing pressure to appraise too high. "It is common for mortgage brokers, lenders, realty agents and others with a vested interest to seek out inflated appraisals to facilitate transactions," Alan E. Hummel, CEO of Iowa Residential Appraisal, told Congress earlier this year. In other words, salespeople and lenders are lining their pockets by encouraging appraisers to look the other way.

An inflated bid or refinancing endorsed by an inept appraiser could pose especially big problems if the market were to falter and you were forced to sell earlier than expected. You could find yourself owing more than the property is actually worth. You'd either have to put your plans on hold or make up the difference from your own pocket.

The situation is potentially more troublesome for investors in homes who plan to flip in a short time.

"It could come back and bite a lot of people," says William Apgar of Harvard's Joint Center for Housing Studies. "If the appraisal is above the market value, then the buyer is upside down in the loan, and these loans are more likely to default. If they can't sell, they may have to go through foreclosure to get out."

Put the lender on notice It's up to your lender to hire the best professional, but there's no harm in letting people know that you watch out for yourself. Tell the lender you'll want a copy of the appraisal report. (Federal lending laws guarantee you this.)

And request an appraiser who has an MAI or SRA designation from the Appraisal Institute, meaning he or she has a minimum of two years of field experience and 200 hours of classroom training.

Share your info If you are selling or refinancing, show the appraiser paperwork on recent remodelings or additions that may not have entered county records yet, says John S. Brenan of the Appraisal Foundation, the industry's standards-setting body.

Showing proof of recent inspections or repairs of your septic tank or roof or heating-and-cooling systems can demonstrate a high standard of maintenance on your part and enhance your home's value, he adds.

Do your own research Whether you are buying or selling, conduct a comparable price survey or ask a realty agent to do it for you. Look at local homes sold in the past six months that are similar to what you own or are prepared to buy, then determine the price paid per square foot. An agent can get you details on the most recent closings -- critical in hot markets where prices rise quickly.

Feel like you're doing grunt work for the appraiser? Get over it, says Jackson. "Present the appraiser with the most recent info and assume he doesn't have it."

Gerri Willis is host of CNN's Open House. Write her at real_assets@moneymail.com.