Colleen O'Hara Team

What is an Appraisal

An appraisal is a professional assessment of the value of a property or an item, conducted by a licensed appraiser. It is typically performed to determine the fair market value of real estate, personal property, or other assets. Appraisals are commonly used in various contexts, including real estate transactions, insurance, taxation, estate planning, and financial lending.

In real estate, an appraisal is crucial when buying, selling, or refinancing a property. Here are the key aspects of a real estate appraisal:

Objective Valuation

Appraisals are conducted by licensed appraisers who are trained to provide an unbiased and objective valuation of a property.


Appraisers typically inspect the property, taking note of its condition, size, features, and any unique characteristics.

Market Value

The appraisal determines the market value of the property, which is the price a willing buyer and a willing seller would agree upon in an open and competitive market.

Data Analysis

Appraisers gather data on recent sales of similar properties in the area, which helps establish a fair market value for the subject property.

Methods of Evaluation

Appraisers use various methods to assess a property's value, including a comparison of similar properties (comparable sales), the cost approach (evaluating the cost of building a similar property), and the income approach (commonly used for income-producing properties).


The appraiser provides a detailed appraisal report that includes their findings, the property's value, the methods used, and relevant data.

Real estate appraisals are critical in determining the value of a property for various purposes, including

Home Purchases

Lenders often require an appraisal before approving a mortgage to ensure that the property's value justifies the loan amount.

Property Tax Assessment

Local tax authorities may use appraisals to determine property tax values.

Selling a Property

Sellers may use appraisals to set an appropriate asking price.

It’s important to note that appraisals are not the same as inspections. An inspection focuses on a property’s condition and identifies potential issues, while an appraisal determines its market value. Both are important steps in various real estate and financial transactions.

Estate Planning

Appraisals help determine the value of an estate for inheritance or tax purposes.


Property appraisals help insurance companies determine the replacement value of a property for insurance coverage.