A professional estimation of something’s value. In real estate, appraisals are conducted for both residential and commercial properties, as well as land. A seller may use an appraisal to set a property’s sale price while a buyer may use it to shape their offer. The lender uses the appraisal to determine whether the property is worth the amount a buyer is attempting to borrow to purchase it.
Example: A professional appraisal typically costs several hundred dollars and is usually conducted after a buyer makes an offer on a property.