What is typically the primary purpose of an appraisal?

The primary purpose of an appraisal is to establish a sale price. An appraisal provides an objective assessment of a property's value, informed by various factors such as market conditions, property characteristics, and comparable sales. This valuation is crucial in real estate transactions because it helps buyers and sellers reach a fair price that reflects the true market value of the property.

When a property is being bought or sold, both parties often require a reliable estimate of its worth to negotiate effectively. The appraisal aids in ensuring that the sale price is reasonable, thereby facilitating the transaction and maintaining market stability. This aspect of appraisals is vital, particularly in securing financing, as lenders typically rely on appraised values to determine how much they are willing to lend based on the value of the collateral.

In contrast, while determining repair costs, documenting property history, and assessing tax liability are all important aspects of property management and evaluation, they are secondary to establishing a sale price in the context of the appraisal process. These other elements may indeed influence an appraisal or be considered alongside it, but they do not represent the primary goal of a real estate appraisal.