Appraisal is an important process in the world of business and real estate. It is a process of determining the fair market value of a certain asset, business, antique, or collectible. This is done to assess how much a certain item is worth and how much it could be expected to sell for on the open market. Appraisals are especially used when dealing with items that are not regularly traded and have a unique value.

In the world of real estate, appraisals can have a great effect in both positive and negative ways. When it comes to home sales, appraisals are a necessary part of the process. Appraisals are used to determine whether the asking price for a home is in line with the worth of the home, and the lender can use the appraisal to determine how much the loan amount will be. If the appraisal comes in lower than the asking price, the lender will only loan an amount that is line with the appraised value in an effort to protect themselves from making a dubious loan. If the appraisal comes in higher than the asking value, then the buyer can rest assured that the price they asked for the home is justified in line with the market.

The appraisal process is overseen by regulatory bodies that have authority to designate appraisers. A qualified and authorized appraiser must have a designation from this governing body in order to legally do appraisals. Appraisals are also necessary in situations such as when a donor wants to make a charitable donation to a tax-exempt organization and they must document the value of the donation.

In conclusion, appraisals are necessary in any kind of transaction involving infrequently traded, unique items. It is important to make sure that the appraiser is qualified and authorized to do appraisals in order to ensure accuracy and legitimacy of the appraisal process. Appraisals can have an important effect on the real estate market, loans, and charitable donations, and if the appraisal is done properly it is a valuable and useful tool for all parties involved in the transaction.