What is an appraisal in real estate terms?

An appraisal in real estate terms refers to an assessment of a property's value conducted by a licensed appraiser. This professional evaluation is based on various factors, including the property's location, condition, and the sale prices of comparable properties in the area. The purpose of an appraisal is to provide an objective, unbiased estimate of a property's fair market value, which can be crucial for financial transactions such as buying, selling, or refinancing a property.

While other options relate to the broader context of real estate transactions—determining price, verifying ownership, and financial arrangements—they do not accurately capture the specific function and process of an appraisal. The appraisal focuses exclusively on valuing the property rather than any related processes or documentation. Understanding this distinction is vital for real estate professionals and those involved in buying or selling property.