What key information does an appraisal analyze to determine property value?

An appraisal analyzes comparable sales and market conditions to determine property value. This approach is rooted in the principle of substitution, which states that a buyer will not pay more for a property than the cost of acquiring a comparable substitute property. By considering recently sold properties in the same or similar neighborhood, appraisers can gauge how the subject property compares in features such as size, condition, and location.

Market conditions are also critical, as they reflect the current trends in demand and supply that influence property prices. These trends may include factors like the economic environment, interest rates, and buyer sentiment.

Together, the analysis of comparable sales and prevailing market conditions provides a comprehensive view that helps establish a fair and accurate valuation of the property, making this approach essential in the appraisal process.