National Real Estate Practice Exam

What is an appraisal?

1. A legal description of property boundaries

2. An estimate or opinion of value

3. A marketing strategy for selling property

4. A tax assessment for property

The correct answer is: An estimate or opinion of value

An appraisal is fundamentally defined as an estimate or opinion of value regarding a particular piece of property. This process involves a thorough evaluation of various factors, including the property's location, condition, comparable sales, and market trends. Appraisals are typically performed by licensed professionals who utilize standardized methods and procedures to provide an unbiased assessment of the property's worth. This estimate is essential for various real estate transactions, such as buying or selling property, obtaining financing, or determining property taxes. The other options reference important aspects of real estate but do not align with the definition of an appraisal. A legal description of property boundaries provides specific details about the dimensions and limits of a property, which is not the same as estimating its value. A marketing strategy for selling property focuses on the techniques and plans used to attract buyers, rather than determining worth. A tax assessment for property typically refers to the valuation performed by a governmental authority for taxation purposes, which may not reflect the market value of the property. All these options illustrate different facets of real estate, but none encapsulate the precise nature of an appraisal as an estimate or opinion of value.