National Real Estate Practice Exam

Which entity typically conducts an appraisal on a property?

1. Real estate agent

2. Independent appraiser

3. Title company

4. Lender's representative

The correct answer is: Independent appraiser

An independent appraiser is typically the entity that conducts a property appraisal. This professional is trained and certified to provide an unbiased opinion of a property's value based on various criteria, including the property's condition, location, and recent sales of comparable properties. This helps to ensure a fair market value is established, which is crucial for various transactions such as sales, refinancing, and tax assessments. Independent appraisers are objective third parties who do not have a vested interest in the sale or purchase of the property, thus ensuring that their assessment is impartial and based solely on market data and appraisal techniques. They utilize standardized methodologies and can provide appraisals for different purposes, including residential and commercial properties. In contrast, a real estate agent is typically focused on facilitating the sale or purchase of properties rather than performing appraisals. A title company primarily deals with the legal aspects of property ownership and transferring titles, not property valuation. A lender's representative may conduct a preliminary assessment of a property’s worth but would rely on a qualified independent appraiser to obtain an official appraisal report for lending purposes. Thus, the role of the independent appraiser is both crucial and specialized in the real estate process.