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What is an Appraisal Report?

An appraisal report is a comprehensive analysis that determines the estimated market value of a property, often required for mortgages, sales, and legal matters. Prepared by a certified appraiser, it includes detailed property descriptions, market trends, and comparisons with similar properties. Curious about how an appraisal affects your property's value? Dive deeper to understand its impact on your real estate decisions.
Alexis W.
Alexis W.

An appraisal report is a report prepared by a professional appraiser to determine the value of some type of property. Appraisal reports are prepared most frequently in real estate transactions to assess the worth of the home and land. Appraisal reports can also be prepared to determine the value of goods, such as fine art or jewelry or anything of value that is difficult to price.

An appraisal report is commonly prepared when a person wants to buy a house or qualify for a mortgage. In these situations, the appraisal report tells the homeowner if the purchase is a good deal or not. The report is also submitted to lenders, who can use the valuation of the home to determine whether to grant the loan.

An appraisal of diamond jewelry might include details like imperfections in the stone.
An appraisal of diamond jewelry might include details like imperfections in the stone.

If goods or items go up for auction, an appraisal report may be completed to determine the value of the goods. This can help buyers to decide whether to bid and buy or not. It can also help the seller set an opening bid, or can help a seller to price his item for the open market if he opts against selling in auction form.

Generally, appraisal reports are made by experts in their field. The qualifications for appraisers vary. Licensing may be mandatory in some parts of the world, such as certain states within the United States, or voluntary and granted by a professional organization, such as the Appraisal Institute of Canada.

A qualified appraiser assesses the condition of the goods when making his report. This can mean coming to a home to look for damage, improvements, or anything else that might affect the value of the specific house. With goods, it can also mean evaluating the item for specific criteria within the category. For example, in appraising diamonds, this can mean looking for inclusions, or imperfections, in the stone, while in appraising fine art it can mean looking for a signature or number on the painting or scanning for signs of damage.

The appraiser also uses market conditions to determine the appraised value of the home or goods. Industry standard usually stipulates what type of market data may be used and how. Market data may include the last known sale price of the home or item, and the prices of comparable items within the field.

After making a careful evaluation of the specific item being appraised and the market conditions, the appraiser writes his appraisal report. In it, he specifies the appraised value of the item. He also specifies his methodology used to arrive at that value.

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Discussion Comments


We also get employee appraisal report forms at work, which we have to fill out to report on how our job is going and whether we agree with the job description and so forth.

Then my boss will fill one out about whether or not I'm doing a good job and file it or do something about it, I suppose.

It's a process I really dislike because it's difficult to come up with things to say most of the time, but it seems to be pretty standard around offices.


@MrsPramm - The problem is that most people don't know how to tell if someone if operating legally. I mean, I get those residential appraisal report forms in my mailbox all the time, saying that property values in the area are going up and they are willing to send someone around to evaluate my home.

Some of them are from legitimate, well known companies (I assume! I would definitely check the phone numbers though if I was actually going to call them) but I'm sure some of them are from people who see a way they can make a quick buck and don't care who it hurts.

I would definitely do research on them before letting them in. I mean, the first scam that jumps to mind has nothing to do with your house per sec. That would just be an excuse to get into your house and evaluate whether you have anything worth stealing and where all the alarms are kept.


I can definitely see why it would make sense to ensure that people who made appraisal reports would have to be licensed. I mean, it would be very easy to come up with a scam if anyone was allowed to run around saying what they thought the value of property or of jewelry is.

My sister actually told me once about how when she was in Thailand she had someone try to sell her some jewelry and they had a fake appraiser and everything, but she figured it was probably costume jewelry and they were working together to hike up the price.

I'd hate to think of that happening to people with property when it's so much more expensive.

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    • An appraisal of diamond jewelry might include details like imperfections in the stone.
      By: alarsonphoto
      An appraisal of diamond jewelry might include details like imperfections in the stone.