The direct answer
A real estate appraisal is an independent valuation assignment performed under applicable professional and regulatory requirements to develop an opinion of value for a defined property interest, effective date and intended use. An appraisal is evidence-based, but it does not guarantee a future sale price, investment return or loan approval.
Define the assignment before the number
A credible valuation depends on what interest is valued, the effective date, intended use, relevant market and assumptions. Two value opinions can differ legitimately when their assignments or effective dates differ.
To apply the approach to an editable scenario, use the Property Value Calculator. For the neighboring question, explore Commercial Property Valuation Calculator.
Understand the appraiser’s evidence
Depending on the property and assignment, an appraiser may analyze comparable sales, income evidence, replacement or reproduction cost and other market data. The methods used should fit the problem rather than being selected to reach a target number.
Know what an appraisal cannot prove
An appraisal is not a home inspection, title report, environmental review or investment guarantee. Market conditions can change after the effective date, and a lender can apply underwriting requirements beyond the appraised value.
Worked example
A property appraised at $500,000 is not guaranteed to sell for $500,000 next month. A buyer may pay more or less, financing conditions can change, and the appraisal reflects its stated effective date, scope and market evidence.
Common mistakes and limitations
Do not describe an automated calculator output, broker estimate or spreadsheet as a professional appraisal unless it actually meets the applicable appraisal requirements and scope.
User-entered comparable estimate only; not an appraisal, AVM or live-market valuation.
Frequently asked questions
Does an appraisal guarantee the sale price?
No. It is an opinion of value for a defined assignment and effective date, not a guaranteed transaction price.
Is an appraisal the same as a property inspection?
No. They serve different purposes and should not be treated as substitutes.
Sources and further reading
The article’s examples are illustrative arithmetic. The references below provide context for operating, valuation or transaction concepts; they do not endorse the assumptions or the calculator.
- IRS — Instructions for Form 709 (2025) — real property valuationComparable-sales concept and adjusting for differences in date, size, condition and location.
- IRS — Publication 551 (12/2025), Basis of AssetsFair-market-value concept and use of similar-property sales as evidence.
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