What is assessed during the loan process to determine a property's value?

During the loan process, a property's value is primarily assessed through a property appraisal. This is a detailed evaluation conducted by a licensed appraiser who analyzes various factors such as the property's location, condition, size, and comparable sales in the area. The appraisal aims to provide an unbiased estimate of the property's market value, which is crucial for lenders to ensure that the loan amount does not exceed the property's worth, thus minimizing risk.

While other options like a market condition report and property tax assessment also provide valuable information about real estate, they do not specifically evaluate the property's fair market value in the context of a loan. A market condition report might focus on broader economic factors and trends affecting property values, while a property tax assessment is primarily concerned with determining local taxes based on the property's value rather than its current market standing. A title search, on the other hand, is unrelated to property value; it verifies ownership and checks for any liens or claims against the property, ensuring that the title is clear for sale or loan purposes.