An appraisal is a document that approximates the value of something. In this case, that something would be a real estate property. Appraisals take into account many things, such as the value of the land and the expected revenue that comes from the property. Appraisals aim to get as close as possible to the marker value of the property. Appraisals are perceived as an opinion. You may agree or disagree with an appraisal. A bad appraisal would be one that you don't agree with the value that the appraiser assigns to the value. There are many types of appraisals. Sometimes they are done to evaluate an estate for a will. Sometimes appraisals are used by banks when a house is foreclosed on. The government also uses appraisals for tax purposes. With the influx of information available to the public, I believe appraisals will decline, as people will attempt to do their own appraisal.
The appraisal is also very important for your loan. As this article shows, an appraisal that is too low can mess up your valuation which can cause you to not get your mortgage loan. This is due to the fact that some banks use a loan to value calculation when deciding to give a mortgage or not. I believe in cases like this appraisers should lean to a higher value than lower when making a tough decision. This is a similar article which contends with appraisals that are on the low side. In this article it is the realtors who are complaining about the appraisals. Low appraisals are bad for realtors in that it effects their customers getting loans and it effects their sales price.
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