The appraisal is the estimation of the price at which the property might reasonably be expected to be sold or let if it is offered for sale/lease. The Real Estate appraisal in general uses techniques which are carefully defined, but productive only when used by experienced practitioners. There are several methods that can be used to asses the value of a property, amongst which "the cost", market and income approaches.

The appraisal information is very important to the bank’s decision on approving or rejecting the loan .No mortgage loan should be made without an appraisal for it provides an evaluation of the value of the loan’s collateral. Based on the value provided by the appraisal, and on other information, the bank decides on the loan amount to be financed.

The evaluation report of a real estate property when prepared to be used by a bank requires an interior and exterior inspection of the subject property.

Other elements included in the evaluation are:

Subject: Basic information such as the address, legal description, owner's and/or borrower's names. The client is also identified here.

Contract: Information on the contract for sale is entered here for appraisals in which a change of ownership is about to occur.

Site: Data on the size, shape, zoning and access to utilities, clear, descriptive photographs of the subject property and comparable sales used.

Improvements: Physical characteristics of the property such as age, materials, and condition Street map that shows the location of the subject property and of all comparable properties that the appraiser used.

The appraisal is performed by a licensed specialist. In Albania licensing is based on a Decision of the Council of Ministers dated 1996, as well as the appropriate regulations prepared by the Ministry of Public Works, Transport and Telecommunications. In addition, Albanian appraisers have set up their own association called “The Albanian Real Estate Appraisals” in order to encourage standards development and the exchange of ideas.

The appraiser is hired to protect the bank’s interests and is not to be influenced by the applicant’s opinion on the value of the property.

The cost of the property appraisal is paid by the would-be borrower. There are banks which ask for the payment of the appraiser prior to the loan’s approval, while other banks pay the appraisal fee by subtracting it directly from the loan amount disbursed to the customer .Usually the fees vary depending on the agreement between the bank and the private appraiser. (See Costs involved in a Mortgage Loan).