What is the primary purpose of a real estate appraisal?

The primary purpose of a real estate appraisal is to estimate the market value of a property. This valuation is crucial for various stakeholders in real estate transactions, including buyers, sellers, and lenders. An appraisal provides an unbiased assessment based on various factors, including the property's location, condition, recent sales of comparable properties, and market trends.

Estimating market value helps ensure that the property is priced appropriately to reflect its worth in the current market. This is particularly important for lenders who require an accurate appraisal to determine how much they are willing to finance, ensuring that the loan amount corresponds to the property's actual market value. The appraisal serves as a critical benchmark for negotiations and decision-making in real estate transactions.

While determining the listing price may involve an appraisal, the appraisal itself is fundamentally about establishing a market value rather than suggesting a specific listing price. Additionally, verifying a property's condition is part of a home inspection, not an appraisal's primary purpose. Lastly, obtaining financing is a process that can involve an appraisal but is not the appraisal's main objective.