What is the essential purpose of a real estate appraisal?

The essential purpose of a real estate appraisal is to establish a property's market value. This is a key function in the real estate market, as an appraisal provides an unbiased estimate of a property's worth based on various factors, including recent sales of comparable properties, current market trends, and the overall condition of the property.

Establishing this value is crucial not only for buyers and sellers but also for lenders who require a professional assessment before issuing mortgages. An accurate appraisal helps ensure that buyers do not overpay and that sellers set realistic prices, thus facilitating fair market transactions.

While negotiating better purchase conditions, determining necessary repairs, or assessing for insurance purposes may be related activities, they do not specifically define the primary goal of an appraisal, which focuses solely on determining the market value of the property. This clear definition helps all parties involved in a real estate transaction to make informed decisions.