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  1. A real estate appraisal is the practice of developing an opinion of the value of real property, usually its market value. The appraisal is performed by a licensed or certified appraiser. If the appraiser's opinion is based on market value, then it must also be based on the highest and best use of the real property. Appraisals can vary in quality and utility. The IRS sets standards for appraisals used for federal tax purposes and other agencies may set other standards.