What does the appraised value of a property generally derive from?

The appraised value of a property is primarily determined through a comparison of similar properties that have recently sold, a method known as the comparable sales approach. This approach allows appraisers to evaluate the value of a property based on the sale prices of homes with similar characteristics in the same area. By analyzing recent transactions, appraisers can adjust for differences in features such as size, location, age, and condition of properties, leading to an informed and accurate assessment of market value.

This process takes into consideration current market trends and helps ensure that the appraisal reflects the true worth of the property in relation to its peers. While interest rates and market conditions do influence overall property values, they do not directly determine the appraised value of an individual property as specifically as the analysis of comparable sales does. Similarly, the seller's price expectation is subjective and does not have a grounding in market data, making it less reliable for appraisal purposes. Historical market value, while potentially informative, is not as relevant as recent sale comparisons, which are more reflective of current market dynamics.