Which option provides everything a lender needs to know to value the property used as collateral for a loan?

The option that provides everything a lender needs to know to value the property used as collateral for a loan is an appraisal. An appraisal is a professional assessment completed by a licensed appraiser, who evaluates the property's condition, location, and market trends to determine its fair market value. This detailed report takes into account various factors, including recent sales of similar properties, physical characteristics of the property, and overall market conditions.

Appraisals are critical in the lending process because they ensure that the lender is not giving a loan that exceeds the actual value of the collateral. This provides protection to the lender, as it reduces the risk associated with securing a loan that could default. The thoroughness and objectivity of an appraisal distinguish it from other evaluations of property value, like comparative market analyses, which may be less comprehensive and primarily focus on recent sales data without the depth of the professional evaluation included in an appraisal.