appraisal
uh-PRAY-zuhl
/əˈpreɪ.zəl/
An expert evaluation or formal estimation of the market value of a property conducted by a licensed professional.
Implies an objective, professional valuation required by financial institutions before issuing a loan.
The story behind the word. Derived from Latin 'ad-' (to) and 'pretium' (price). In medieval Europe, an 'apreisiour' was an official appointed to set fair price tags on goods offered in feudal markets to prevent price gouging.
Word relationships
- valuation: Valuation is a general financial estimate, whereas an appraisal is a formal, regulated report carried out by a licensed professional.
- assessment: An assessment is typically performed by municipal tax assessors for property tax purposes, whereas an appraisal determines market value for buyers and lenders.
- guesswork: Guesswork lacks methodology, while an appraisal relies on comparative market data and professional standards.
Commonly confused with
- appreciation: Appraisal is the evaluation of a property's value at a given moment, whereas appreciation is the actual increase in value over time.
Word family
- appraise (verb): To assess or evaluate the worth of something.
- appraiser (noun): A licensed professional who conducts property valuations.
Collocations
- property appraisal
- appraisal value
- independent appraisal
- appraisal contingency
- formal appraisal
Example sentences
- "An independent appraisal remains the primary defense for mortgage lenders seeking to confirm property value before authorizing funds." Finance
- "Because the home appraisal came in lower than the agreed purchase price, the buyer renegotiated the mortgage terms." Real Estate Purchase
Memory hook
An APPRAISAL puts a PRAIse tag (price tag) on your house. Praising the true price of property.
When not to use
Do not confuse with a seller's asking price or an owner's personal belief about what their house is worth.
Fun facts
- During real estate booms, appraisal gaps occur when buyers bid higher than appraisers can justify using historical sales data.
Related words
Explore more words
interview, valuation, Appreciation, evaluation, approbation, applause
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