Property valuation or real estate appraisal is the process by which Market value of a property is estimated.

This is an important part of any financial deal involving property, because unlike with most other products, market prices of real estate cannot be read off the market because no two properties are alike.

Real Estate appraisal in usually carried out by a professional called the land or property valuer or sometimes the surveyor. They need to be licensed or certified by relevant professional associations.

Values 

In addition to Market Value, also called The Fair Value or The Open Market Value, which estimates the price at which the property can be exchanged in a normal market transaction, other values of the property can also be estimated through an appraisal.

For example Liquidation Value or Forced Sale Value will estimate the price of the real estate if it was subjected to liquidation due to bankruptcy or some other reason. “Value in Use” is an estimation of the present value of the cash flow generated from the property. Insurable value is the amount that the real estate can be covered for.

It is important to note that Market Value estimated will not necessarily be the price at which the property will be exchanged. Market Value as stated is estimated for a typical market transaction, while in reality lot of external factors intrude to make each transaction atypical; for instance due to it being tied to other transactions, or due to personal relationships between the parties concerned.