A real estate appraisal is a determination of the fair market value of a property. The appraiser must assign a value to the property and show evidence supporting the valuation.

The appraiser does not create value; he scrutinizess the market to arrive at a value estimate based on recent comparable sales. As the appraiser compiles data pertinent to a report, consideration must be given to the site and amenities as well as the physical condition of the property. (An appraiser may spend only a short time inspecting the property.  He (or she) is not inspecting the property for structural integrity; that is the job of an inspector.)

Before the appraiser can arrive at a final opinion of value, he must do considerable research to collect data, then analysize the data pertaining to the property and sales of similar properties in the area.

Due to the many types of value, such as Fair Market Value, Insurance Value, Tax Value and Value In Use, the appraiser must define the purpose of the appraisal precisely.