What is the best definition of an appraisal?

An appraisal is defined as an estimate of value, which plays a crucial role in real estate transactions. This process typically involves a licensed appraiser assessing various factors related to the property, including its condition, location, and market trends, to determine its fair market value. Appraisals are essential for buyers, sellers, and lenders, as they help ensure that the property's valuation aligns with the financing provided and that buyers are not overpaying.

The focus of an appraisal is not merely a physical inspection of the property, as it also incorporates market analysis and comparable sales data to arrive at a comprehensive valuation. While negotiations in real estate can impact the sale price or terms, they do not represent the formal evaluation of a property's worth, which is what an appraisal provides. Additionally, a listing agreement is a contract between a property owner and a real estate agent outlining the terms for selling the property, rather than an estimation of its value.