A professional assessment of a property’s market worth, typically conducted by a qualified appraiser, determines a property’s likely selling price. For example, an appraisal for a single-family home considers factors like location, size, condition, recent sales of comparable properties, and current market trends to arrive at a reasoned estimate. This assessment differs from a real estate agent’s market analysis, which serves as a pricing recommendation rather than a formal valuation.
These assessments are crucial for various real estate transactions. Lenders rely on them to gauge the collateral’s value for mortgage loans. Buyers and sellers use these valuations to inform their negotiation strategies and ensure fair pricing. Historically, standardized appraisal practices emerged alongside the growth of mortgage lending, providing a more objective and reliable basis for financial decisions concerning property. Their importance has only increased with the complexity of modern real estate markets.