What is the purpose of a property appraisal?

The purpose of a property appraisal is to establish the market value of a property for various purposes. A property appraisal is a professional estimation performed by a licensed appraiser, who analyzes various factors including the property's condition, location, and comparable sales in the area. This valuation is crucial in real estate transactions as it helps buyers, sellers, and lenders to understand the fair market value of the property being considered.

This process is essential in situations such as determining a listing price for a seller, ensuring that a buyer is not overpaying for a property, or when a lender needs to assess the value before issuing a mortgage. Appraisals are also used for tax assessments, divorce settlements, estate planning, and refinancing purposes, making the understanding of market value fundamental in the real estate industry.

While other options touch on relevant aspects of real estate, such as neighborhood crime rates or interest rates, they do not directly relate to the core function of appraisals in providing a concrete property value assessment.