What is the main purpose of an appraisal in real estate?

The primary purpose of an appraisal in real estate is to establish the market value of a property. This process involves a trained appraisal professional evaluating various factors such as the property's location, size, and condition, as well as recent sales of comparable properties in the area. By analyzing these elements, the appraiser provides a professional opinion of the property's value, which is crucial for buyers, sellers, lenders, and real estate professionals during transactions.

Having an accurate appraisal is particularly important for lenders who need to ensure that the property being financed is worth the amount they are lending. This helps protect their investment and ensures that the buyer is not overpaying. Additionally, understanding the market value is essential for sellers in setting an appropriate listing price to attract buyers and for buyers looking to make informed offers. An appraisal also plays a significant role in many other aspects of real estate transactions, including negotiations and determining investment viability.