In real estate transactions, what is the main purpose of an appraisal?

The primary purpose of an appraisal in real estate transactions is to assess the market value of a property. An appraisal provides a professional evaluation based on various factors, including the condition of the property, comparable sales in the area, and current market trends. This valuation is essential for several reasons: it helps buyers and sellers agree on a fair price, it informs lenders of the property's worth for mortgage decisions, and it can guide investment decisions.

The determination of market value is crucial for ensuring that transactions are conducted fairly and transparently. It informs all parties involved, helping to avoid issues such as overpricing or underpricing a property. By having a clear, independent assessment of value, buyers and sellers can make informed decisions based on a thorough understanding of what the property is worth in the current market context.