Real estate appraisal Nightmares

One of the biggest issues that is brewing is conflicts over home values. This week I am dealing with a home that was sold for over one million, appraised for 975,000. The seller reduced to the appraisal.
Then the lenders said that the appraisal was wrong and that the home was only worth 800,000. And that would be their basis for the loan.
This home was without comparable sales to back up the price. But, it is my opinion that a home is worth what a buyer will pay for it. Period.
With the swelling of forclosures and bank sales in Manatee County there will be lots of LOW sales that will pull down market values unfairly for other homes that are not in a distress situation.
The lenders need to lighten up a bit.