An appraisal is the valuation of an object by someone well-qualified or authorized to make such an assessment. For example, a home may be appraised at having a fair market value of $250,000 or some jewelry might be appraised by a jeweler as having a value of $500. The appraisal represents the object’s worth in the current situation, which is not necessarily the maximum amount it could bring on the open market.
A special type of home appraisal, known as a Broker Price Opinion, places a rough valuation on a home based upon a cursory examination and a comparison with similar properties in the region. They are usually offered for free or for a small charge. Although a Broker Price Opinion may be presented as a valid appraisal, it is not rigorous and does not satisfy many legal requirements of an actual appraisal. Therefore, home appraisals for mortgage loan purposes most often require that valuation be determined by a licensed appraiser.