An appraisal is defined as what?

• A. A type of loan
• B. A tax assessment
• C. Estimate or opinion of property
• D. A legal act of transfer

Answer: (C)

An appraisal is a professionally prepared estimate or opinion of what a property is worth as of a specific date. A licensed appraiser analyzes market data, uses comparable recent sales, evaluates the property’s features and condition, and may apply different approaches (such as sales comparison or cost/income methods) to arrive at a value. This value helps lenders determine loan amounts, guides buyers and sellers in pricing, and supports other financial decisions. It is not a loan, not a tax assessment (which is used to determine property taxes), and not the legal act of transferring ownership (which is a deed or closing).