What is the purpose of a real estate appraisal?

The purpose of a real estate appraisal is to determine a property's market value for various purposes. This is essential during transactions such as buying, selling, or financing property, where established market value informs decisions. Appraisers use a combination of methods, including comparable sales analysis, cost approach, and income approach, to derive an accurate valuation of the property based on current market conditions and property characteristics.

Determining a property's market value is critical for sellers looking to price their properties competitively, buyers needing to understand what a fair offer would be, lenders assessing risk for mortgage applications, and for property taxes. An appraisal provides an objective evaluation that helps all parties involved in a real estate transaction make informed decisions.