What is the main function of an appraisal in real estate?

The main function of an appraisal in real estate is to determine a property's value based on market analysis. Appraisals are conducted by licensed professionals who analyze various factors, including recent sales of similar properties, the condition of the property, its location, and current market trends. This process provides an objective valuation that is crucial during transactions, such as buying or selling a property, refinancing mortgages, or assessing properties for taxation purposes.

By establishing a property's market value, appraisals help all parties involved in a real estate transaction understand what a property is worth in the current market. This valuation plays a pivotal role in ensuring that buyers do not overpay and that sellers receive a fair price based on comparative market data. The appraisal process contributes to market transparency and helps to protect the interests of homeowners and lenders alike.