What is the main purpose of an appraisal?

The primary purpose of an appraisal is to establish the fair market value of a property. This valuation is essential in various real estate transactions, including buying and selling properties, refinancing mortgages, and determining property tax assessments. Appraisers use a variety of methods and analyze comparable sales, market trends, and property conditions to arrive at a value that reflects what a buyer is willing to pay in a competitive market.

By determining the fair market value, the appraisal helps both buyers and sellers set appropriate prices and assists lenders in assessing the risk involved in financing the property. Understanding the fair market value ensures that all parties have a clear and equitable basis for any transaction or financial decision regarding the property.