In the simplest terms, an appraisal is an opinion of value.

When that opinion is formed by a trained and qualified appraiser, it is based on a systematic process of defining and planning a solution to the appraisal problem, gathering and analyzing all necessary information, applying the approaches to value, and reconciling all of that analysis and data into that opinion of value. This opinion can be stated in the form of a single value or a value range.

In arriving at a value opinion, an appraiser will consider several methods of appraisal application that approach the concept of property value from different perspectives.

These are referred to as the “approaches to value” and are the cost approach, market approach, and income approach.