HACKENSACK, N.J. — Peg and Don Cordes spent $30,000 to upgrade their Mahwah, N.J., condo before putting it up for sale, hoping to stand out in a tough market. They updated the kitchen and baths, installed hardwood floors, had the interior painted and replaced the heating and air conditioning.

Just weeks after the condo hit the market, they accepted an offer of $375,000. But then the appraiser for the buyer’s mortgage lender valued the place at only $365,000 - which, according to Peg Cordes, didn’t take into account all the improvements.

Eager to move to Florida, the couple reluctantly cut their price.

“When your back’s against the wall, you have no choice,” said Peg Cordes, a retired customer-service employee.

As the Cordeses discovered, even when a buyer and seller agree on a price, appraisers often take a more skeptical look at values - especially since the housing bust left many lenders stuck with mortgages larger than the value of the homes they cover. Real estate agents say lower appraisals often jeopardize deals.

“You hold your breath until the appraisal comes in,” said Phyllis Hoffer, a Re/Max agent who represented the Cordeses.

Some agents say the appraisals are short-circuiting any potential rise in prices.

“Since the appraisers are being super-ultraconservative, the appraisal process is actually stopping properties from appreciating,” said John Reilly of Century 21 Van Der Wende Associates in Little Falls, N.J. “They are making no allowance for the fact that part of the value of anything is what a buyer is willing to pay and what a seller is willing to accept.”

But appraisers say they’re just echoing the reality of the housing bust, in which home prices have declined about 35 percent from their peaks nationwide, according to the Standard & Poor’s/Case-Shiller index. The most recent Case-Shiller numbers show prices are still trending lower.

“Appraisers don’t set the real estate market; they reflect what’s happening in the market,” said a recent statement from the Appraisal Institute in Chicago. “Think of the appraiser as a mirror, reflecting the market - and the market is depressed, as home prices have fallen far below values of a few years ago.”

“As an appraiser, you have to make sense of an imperfect market,” said Scott Zotollo of Zots Appraisal Services in Rochelle Park, N.J. He said that since the housing bust, mortgage underwriters have been asking for more documentation to back up appraisals.

Ken Chitester, a spokesman for the Appraisal Institute, said he’s heard the same thing from other appraisers.

“If lenders are being more cautious today, can you blame them, given the losses on their books?” Chitester said.

A weak job market, a sluggish economy and the high level of foreclosure properties headed to market all point to uncertainty about the future path of home prices, said Keith Gumbinger, a vice president at HSH.com, a Pompton Plains, N.J., company that tracks the mortgage market.

“If you’re an appraiser, you have to work from a cautious standpoint,” he said.

When an appraiser comes in below the contract price, sellers and buyers have a few choices. Most often, real estate agents say, sellers lower their price to the appraised amount, as Peg and Don Cordes did.

That can be a windfall for buyers like Cheryl and Cagdas Ozturk, who just bought a two-family house in Carlstadt, N.J. After they agreed on a price in the $300,000s, the appraisal came in almost $23,000 lower. The seller took a couple of weeks to think it over, as the Ozturks waited nervously.

“I thought the whole deal would collapse,” recalled Cheryl Ozturk. But the seller ultimately decided to cut the price to allow the sale to go forward, saving the Ozturks almost $23,000.

“It was very fortunate for us,” Cheryl Ozturk said.

In other cases, the seller and buyer split the difference, and the buyer comes up with more money for the down payment. Sometimes the real estate agent asks the appraiser to take another look, or the buyer goes to a different mortgage lender and pays for another appraisal. And sometimes the home sale just falls through.

Antoinette Gangi, a Re/Max agent in Woodcliff Lake, N.J., said she recently worked with a seller who accepted the lower of two offers because he believed the higher offer wouldn’t fly with an appraiser.

Lenders hire appraisers to make sure the home - the collateral for the mortgage - is worth enough to cover the value of the mortgage if the homeowner can’t pay.

Appraisers typically value homes based on comparisons with at least three recent sales of similar homes nearby, though some lenders require comparisons with at least four, according to Doug Cowie, an appraiser based in Waldwick, N.J. Appraisers also look at pending sales and homes on the market, and factor in whether home prices are trending up or down. They make adjustments based on a property’s condition, location and size, compared with the homes it’s being measured against.

The shrinking number of home sales during the housing bust made appraisals more difficult, because in some cases there were few or no recent comparable sales that appraisers could evaluate, said Gumbinger of HSH.com.

Appraisers can consider foreclosed properties and short sales, in which the lender accepts less than is owed on the mortgage, if those are relevant, according to the Appraisal Institute. Some real estate agents question the inclusion of distressed sales, which tend to sell at discounts of 25 percent or more, according to research. But in neighborhoods where distressed sales make up a significant part of the market, most experts say they should be considered in an appraisal.

Lenders typically pay $225 to $400 for an appraisal, Cowie said.

Appraisals became a point of controversy a few years ago when federal regulators tightened the rules on hiring appraisers. The aim was to remove conflicts of interest that arose during the housing boom - for example, when mortgage brokers hired appraisers who provided generous valuations to support inflated mortgage amounts.

One result was that appraisers are now hired by appraisal management companies or banks’ appraisal departments, rather than directly by the people writing the loan. Many appraisers say that appraisal management companies cut the fees that appraisers receive, leading many experienced appraisers to refuse to work with them, according to Chitester.

And some real estate agents have complained that the management companies sometimes hired lower-priced appraisers from outside the area who were not familiar with local prices.

Even though the appraisal comes late in the sale process, several real estate agents said they bring it up when they first meet with sellers to discuss the listing price.

“I definitely have based my market analyses for prospective sellers primarily on the criteria that an independent mortgage appraiser would use,” said Barbara Ostroth, a Coldwell Banker agent in Oradell, N.J.

“I try my hardest to explain to the seller that if they price their house too high, not only won’t it sell, but it won’t get appraised” at that price, said Ellen Weiner, a Weichert agent in Clifton, N.J.