Appraisal is an opinion of value, usually the market value of a piece of property. Market value is the most probable price at which a property would be bought or sold by knowledgeable people. Specialists called appraisers make appraisals. They are trained by professional appraisal societies, and many colleges and universities offer courses in appraising.
Lending companies have real estate appraised before they grant a mortgage on it. Government agencies use appraisals to help determine assessments, property taxes, and the price at which they buy private property for public use. Many people have private property appraised before they buy it or sell it.
Appraisers consider several factors in arriving at their estimates. These include the sale price of similar property, reproduction cost less depreciation, and estimated future income from property use. Market prices usually provide the best estimate of market value. Property location often affects real estate value more than physical improvements made on property.
