An appraisal is a valuation of property, such as real estate, a business or an antique, by the estimate of an authorized person. To make a valid appraisal, the authorized person must have a designation from a regulatory body governing the jurisdiction of the appraiser. Appraisals are typically used for taxation purposes or to determine a possible selling price for the property in question.
In real estate transactions, appraisals help lenders determine the value of properties they are being asked to finance. If a home appraisal comes in below the amount of the purchase price, mortgage lenders are likely to decline to fund the deal.