Appraisal
In the field of real estate transactions, appraisal refers to the act of determining the value of a property. An appraiser usually performs this function before a loan can be issued by a bank, to verify that there is sufficient collateral should the borrower default.
There are various methods of determining the value, including:
- comparison - Comparing the property to other similar ones
- rebuild - Determining what it would cost to rebuild the structure
- income - For commercial properties, determining the income the property generates
Professional appraisers exist in other fields, such as antiques, art or most other valuables that may need to be bought, sold or insured.
