What is the purpose of a property appraisal?

The purpose of a property appraisal is to evaluate the market value of a property based on comparable sales, the condition of the property, and its location. Appraisals are critical during transactions, as they provide an unbiased assessment that buyers, sellers, and lenders can rely on to make informed decisions.

In determining the market value, appraisers analyze recent sales of similar properties in the area, known as "comps," as well as the unique attributes of the specific property being evaluated, such as its size, age, and condition. This comprehensive analysis ensures that the valuation reflects current market trends, helping to establish a fair price for both the buyer and the seller.

Other options focus on different aspects of real estate but do not capture the primary role of an appraisal. For instance, assessing decoration needs, establishing rental rates, or evaluating tax obligations serves different purposes in the real estate process not directly linked to determining market value.