Appraisal

A written justification of the price paid for a property, primarily based on an analysis of comparable sales of similar homes nearby. The appraised value is an appraiser's opinion of a property's fair market value, based on an appraiser's knowledge, experience, and analysis of the property. Since an appraisal is based primarily on comparable sales, and the most recent sale is the one on the property in question, the appraisal usually comes out at the purchase price. An appraiser is an individual qualified by education, training, and experience to estimate the value of real property and personal property. Although some appraisers work directly for mortgage lenders, most are independent. Most banks or lenders select appraisers for transactions based on a rotation system containing approved/certified appraisers. Some lenders use appraisal services, which aren't as popular with Realtors, due to the occasional assignment of an appraiser to a property that might be somewhat out of their area of expertise (geographically). This usually only happens in rural areas where approved appraisers are not as readily available.