What is an appraisal?

An appraisal is fundamentally defined as an opinion of the monetary value of a property, which aligns with the selected answer. Appraisals are conducted by professional appraisers who evaluate various factors including the property's condition, location, market trends, and comparable sales. The resulting opinion serves a critical role in real estate transactions, as it helps determine a property’s worth for purposes such as buying, selling, financing, or taxation.

While the market comparison of similar properties is an aspect of the appraisal process, it is not the entirety of what an appraisal encompasses. Appraisals often integrate additional evaluation methods and considerations beyond merely comparing market data.

A legal document certifying property ownership pertains to deeds and titles, which distinctly differ from appraisals as they focus on ownership rather than value.

Similarly, an estimate of construction costs for a new property is a different function in real estate, centered on the financial aspects of construction rather than assessing an existing property's market value.

In essence, the correct answer captures the essence of what an appraisal is—an informed assessment of how much a property is worth, ensuring that buyers, sellers, and other stakeholders have a sound basis for their financial decisions in the real estate market.