An appraisal is the process by which the value of an item or property is determined. This is necessary in a variety of contexts. One common instance is in the purchase, sale or refinancing of homes or other real estate. Appraisals are also required by insurance providers, both to gain coverage over property and when a policy holder makes a claim after property has been lost or damaged. Appraisals can also occur in optional settings, where one simply wants to know the value of something they possess.
An appraisal is conducted by an expert–called an appraiser–who inspects the object in question. The appraiser also looks at relevant data, such as the recent sale or market value of similar objects, previous sale or purchase prices of that specific object, or other determining factors.
[Last updated in June of 2022 by the Wex Definitions Team]