What is the primary purpose of real estate appraisal?

The primary purpose of real estate appraisal is to determine the market value of property. A real estate appraisal involves a professional evaluation of a property's worth based on various factors, including its location, condition, and comparable properties sold in the area. This valuation is essential for a variety of transactions, including buying, selling, and financing real estate, as it provides a reliable estimate that can help both buyers and sellers make informed decisions.

While estimating repair costs, assessing property taxes, and approving mortgages are important aspects of real estate transactions, they do not represent the fundamental goal of an appraisal. Estimating repair costs focuses on the expenses required to make a property functional or market-ready, which may not affect its appraised value directly. Assessing property taxes involves determining the value of property for tax purposes, which may differ from its market value due to different criteria used. Lastly, the process of approving mortgages relies on the appraisal to determine how much a lender is willing to finance, but the act of appraisal itself is centered on establishing market value.