What Is The Meaning Of Appraisal In Real Estate?

An opinion of value with a defined purpose and date

A real estate appraisal is an opinion of what a property is worth, built from evidence and careful analysis. The report says which property it covers, who will use it, the effective date and the scope of work. Those details tell you exactly which question the report answers.

Why the purpose matters

A lender, a homeowner, an estate representative and an attorney can each need a value for a different reason. A report written for one of them shouldn't be assumed to work for the others.

For an estate or another past-date matter, the effective date can differ from the day we visit. Ask your adviser which date and definition of value they need, and share that with us before you order.

How the analysis works

1. Understand the assignment. We agree on which property is being valued and who will use the report.
2. Describe the property. We gather records and make the observations the scope calls for.
3. Research the market. We study the evidence, including comparable sales where they fit.
4. Explain the conclusion. We write a report that ties the evidence and our reasoning to the value.

What can affect a home's value

Location, size, layout, age, condition, improvements and unusual features can all play a part, and so can the market on the valuation date. A citywide median or an online estimate can't stand in for looking at your particular home.

Appraisal, inspection and assessment are different

An appraisal answers a question about value. A home inspection looks at physical condition for its own purpose. An appraisal won't tell you what's hidden behind a wall.

A tax assessment belongs to the government's tax process. A private appraisal can be useful evidence if you question an assessment, but it doesn't set your tax bill. Insurance can also call for a different measure than market value, so check with whoever is asking for the number.

Using the report

A value conclusion can shape a sale or another big decision, but it can't promise a sale price, a loan, a court's acceptance or a tax result. Read the report with its intended use and limits in mind.

For a Wilmington home, start by telling us the decision you need the appraisal to help with. Our guide to the appraiser's work walks through the process in more detail, and if a question is still nagging you, call (302) 298-3336 and we'll talk it over.