The appraisal required by a lender defines the _______ value of a property.

The appraisal required by a lender specifically defines the market value of a property. Market value is an objective assessment of the price a property would sell for in a competitive and open market under normal conditions. This value is determined based on various factors, including the property’s features, the condition of the local real estate market, recent sales of comparable properties, and economic factors.

When lenders require an appraisal, they are primarily concerned with understanding the current market value to ensure that they are providing a loan that is secured by a property worth the amount being borrowed. This is crucial for minimizing risk; if the borrower defaults, the lender wants to know that they can recover the loan amount through the sale of the property.

The other options, such as price, anticipated value, and agreed-upon value, do not necessarily reflect the objective assessment inherent in an appraisal. Price can vary based on individual seller and buyer negotiations, anticipated value may suggest future expectations which can be uncertain, and agreed-upon value may reflect a mutual decision that is not grounded in comprehensive market data, which an appraisal aims to provide.