An appraisal is an act or process of developing an opinion of value. It usually is for a specific property’s value on a given date. An appraiser is a person who is expected to value property in a competent, objective, and impartial manner. An appraiser usually gives his or her opinion of value in a written statement called an appraisal report.

The majority of appraisals are performed for companies involved in real estate financing. Almost everyone who purchases a single-family residence takes out a loan to cover the majority of the cost of the house. Lenders need to be sure that the value of the real estate being used as collateral is sufficient to cover the amount of the loan. Collateral is property pledged to secure a loan. Lenders can take ownership of the property if the debt is not paid.