What is an appraisal?

An appraisal is primarily an evaluation conducted to determine the fair market value of a property. This process typically involves a qualified appraiser assessing various factors, including the property’s location, condition, and recent comparable sales in the area. The purpose of an appraisal is to provide an unbiased financial assessment, which is crucial for buyers, sellers, lenders, and other stakeholders in real estate transactions.

Being informed about the fair market value is essential for making informed decisions in property transactions. This valuation helps ensure that buyers are not overpaying and that sellers can establish a competitive price based on current market conditions. Appraisals are often required by lenders when financing a home purchase or refinancing, as they need an accurate value of the property being collateralized for the loan.

While the other options may relate to aspects of real estate, they do not accurately define what an appraisal is. The legal document for transferring property pertains more to deeds or titles, calculating property taxes usually involves assessing market value but is more focused on taxation purposes, and selling techniques do not encapsulate the appraisal process itself.