The number one misconception a real estate agent has about market demand is thinking that multiple offers on a particular house, establishes market value. Definitions of market value say "that the value of a house is established by the market trend of compatible houses in that neighborhood". The information or spin a buyer receives about a particular house is typically from all parties who have a stake in the sale of the house (commission). The Market Conditions Report (MC Report) now provided with most appraisals, takes a look at all of the "market" activity in a specific "neighborhood", "specific to the characteristics" of the house in question. The MC Report analysis active, pending, sold, expired and withdrawn compatible homes that have occurred over the last twelve months, in the neighborhood. It gives you a "trend" of what's happening with values specific to the house in question.
So the next time you're surprised at what the appraised value of a property is or there is controversy about the appraised value, take a long look at the Market Conditions Report.