What is an appraisal adjustment in the context of property valuation?

An appraisal adjustment refers to a modification made during the property valuation process to account for differences between comparable properties and the subject property being appraised. This is essential in determining a fair value for the property, as appraisers need to consider various factors such as location, size, condition, and features of both the subject property and the comparables (often known as "comps").

For instance, if the subject property has a larger lot size than a comparable property, the appraiser may make an upward adjustment to account for this difference, influencing the final valuation. Adjustments ensure that the appraisal reflects the true market value by aligning the features of the subject property with those of similar properties. This practice is a fundamental part of the comparative market analysis used in real estate appraisal.

The other options relate to different concepts in property valuation and taxation, such as tax liabilities and appeal processes, which do not specifically define what an appraisal adjustment entails within the appraisal practice.