An appraisal is an impartial professional party’s valuation of a particular property based on factors like size, condition, and comparison to similar properties that have recently sold in the area. An appraiser will inspect the exterior and sometimes the interior of the property to get an idea of its condition. After the inspection, the appraiser will compare the condition of the home with the comparable properties (called “comps” for short) in the area. The appraiser will then size up the major components of the property according to industry guidelines and come up with an estimated value. Appraisers may also estimate replacement costs of the property. This is determined by valuing an empty plot of real estate and estimating the cost it would take to build a home of a similar size and construction. The appraiser reduces this cost by an age factor to compensate for things like depreciation and deterioration.