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

The main purpose of an appraisal in real estate is to provide an objective assessment of a property's market value. This process involves a professional appraiser evaluating various factors related to the property, such as its location, condition, size, and comparable property sales in the area. The appraisal serves as an independent estimate of the property's worth, which is essential for buyers, sellers, and lenders.

An accurate appraisal helps ensure that the sale price is justifiable and can prevent issues such as overpaying for a property or a buyer being unable to secure a mortgage due to discrepancies in the appraised value versus the purchase price. By relying on an unbiased evaluation, all parties can make informed decisions based on the current market conditions. This assessment is particularly crucial in financing arrangements, as lenders often require appraisals to protect their investment and ensure the loan amount aligns with the property's actual value.