What is the primary function of a real estate appraisal?

The primary function of a real estate appraisal is to estimate the market value of a property. This process involves a professional appraiser assessing various elements of the property, including its condition, location, and the value of comparable properties in the market. The appraisal results are crucial for different stakeholders such as lenders, buyers, and sellers because they provide an objective assessment of what a property is worth at a given moment in time.

Market value is important for various transactions, including purchases, refinancing, and property taxation. An accurate appraisal helps ensure that buyers are paying a fair price and that lenders are financing properties at appropriate values, which mitigates their risk. This function aligns closely with the fundamental principles of real estate, as it builds a common understanding of value that is vital for facilitating transactions and investment decisions.

Other functions listed, such as promoting properties for sale or determining property zoning, do not directly relate to the appraisal process, while negotiating sale prices may rely on the findings from an appraisal but is not the appraiser's responsibility. The focus of an appraisal is primarily on establishing a fair and impartial market value.