What is the primary purpose of a real estate appraisal?

The primary purpose of a real estate appraisal is to estimate the property's market value. This process involves a comprehensive analysis of the property, considering various factors such as its location, condition, features, and recent sales of comparable properties in the area. The appraised value is vital for a range of transactions, including buying, selling, refinancing, and securing loans, as it helps stakeholders understand what the property is worth in the current market.

While determining tax liabilities, setting rental prices, and assessing insurance coverage are all important in their own right, they are secondary to the main function of an appraisal. The market value estimation is essential for making informed financial decisions and ensuring fair transactions in real estate. Consequently, the appraised market value provides the basis for these other considerations, making it the cornerstone of real estate valuation.