Real Estate Appraisal Practice Exam 2025 - Free Appraisal Practice Questions and Study Guide

The appraisal report is considered the basis for appraisals because it is a comprehensive document prepared by a qualified appraiser that outlines the valuation of a property based on various factors. This report includes an analysis of the property’s characteristics, comparable sales data, market trends, and the appraiser's professional opinion of value. It serves as the authoritative source for lenders, buyers, and sellers to understand the value of a property in the current market context.

The sales agreement, although important, is a contract pertaining to the sale and does not provide an impartial valuation based on market analysis. The title deed primarily establishes ownership and legal rights associated with the property rather than its market value. A homeowner's insurance policy outlines coverage and protection for the property against certain risks but does not reflect its market value in appraisal terms. Therefore, the appraisal report stands out as the definitive document used in the valuation process.