What is the primary purpose of real estate appraisal?

The primary purpose of real estate appraisal is to determine the market value of a property. This valuation process provides an objective assessment of a property's worth based on a variety of factors, including current market conditions, comparable sales, the property's condition, and unique characteristics.

Understanding the market value is critical for various stakeholders, such as buyers, sellers, investors, and lenders, as it helps them make informed decisions regarding sales, purchases, and financing of properties. This objective value determination is particularly essential in transactions where accurate pricing is important to ensure that parties are entering into fair agreements.

While obtaining a loan, ensuring compliance with zoning laws, and facilitating property inspections are relevant activities in real estate, they serve different functions. An appraisal primarily focuses on establishing market value rather than directly addressing these other aspects of real estate transactions.