How is "appraisal" defined in real estate terms?

In real estate, "appraisal" is defined as an assessment of a property's market value. This process involves a professional appraiser evaluating various factors, including the condition of the property, its location, recent sales of comparable properties, and the overall real estate market conditions. The appraisal provides an objective estimate that is often used by lenders, buyers, and sellers to ensure that the property's value is understood during transactions or refinancing.

This definition is particularly important in real estate transactions, as it helps ensure that buyers do not overpay for a property and that lenders are making sound financial decisions when approving mortgages. An accurate appraisal is crucial for protecting all parties involved by providing a clear valuation based on current market conditions and the unique characteristics of the property.