What does an appraisal primarily determine?

An appraisal primarily determines the market value of a property, which is a crucial aspect in real estate transactions. Market value reflects what a buyer is willing to pay for a property, based on various factors including current market conditions, comparable property sales, and the appraiser's assessment of the property's characteristics. This value serves as an essential benchmark for both buyers and sellers, ensuring that the price is aligned with the current market situation.

By establishing the market value, appraisals assist lenders in determining how much financing to provide and can also inform the seller's pricing strategy. Understanding the market value is key for all parties involved in a real estate transaction, as it provides insight into whether a property is being sold at a fair price.

In contrast, future resale potential relates to various unpredictable elements such as market trends and property developments, thus not falling under the direct determination of an appraisal. The total cost of repairs needed, while important for a buyer's evaluation of property condition, is not the primary focus of an appraisal. Similarly, the tax assessment value is determined based on different criteria and methodologies, including assessed values set by local tax authorities, distinct from the objective analysis performed during an appraisal.