What is a real estate appraisal?

A real estate appraisal is an evaluation process that determines the market value of a property, based on various factors such as location, condition, and comparable property sales. Appraisals are critical in real estate transactions, as they provide an unbiased estimate that helps buyers, sellers, and lenders make informed decisions. This assessment is typically conducted by a licensed appraiser who uses established methodologies to conclude the property's worth, which can influence mortgage lending, buying, and selling practices.

In contrast, analyzing tenant payment history focuses on past tenant behavior and financial reliability, which is more related to property management than valuation. Managing property operations involves overseeing day-to-day management tasks, which does not pertain to determining a property's value. Financial forecasting is about projecting future financial performance based on current and historical data, which is distinct from appraising a physical asset. Therefore, the core essence of a real estate appraisal is centered around establishing the market value of a property.