What is the primary function of an appraisal in real estate?

The primary function of an appraisal in real estate is to estimate the market value of a property. An appraisal provides an objective analysis of a property's worth based on various factors such as the property’s condition, location, recent sales of comparable properties, and current market trends. This is essential for various stakeholders in a real estate transaction, including buyers, sellers, and lenders, as it helps them make informed decisions regarding purchasing, selling, or financing a property.

Accurate property valuation is crucial not only in helping buyers understand what a fair price is but also for sellers to price their property competitively. Additionally, lenders require an appraisal before approving a mortgage to ensure that the property is worth the amount being borrowed. Thus, an appraisal serves as a vital tool in the real estate market, directly influencing financial decisions and facilitating equitable transactions.