What is the key function of a real estate appraisal?

The key function of a real estate appraisal is to provide an unbiased estimate of a property’s value. This process is conducted by a licensed appraiser who evaluates a property based on various factors, including its condition, location, and comparable properties in the area. The goal is to arrive at a fair market value that can be used for various purposes, such as securing a mortgage, establishing a selling price, or adjusting tax assessments.

This valuation is critical in real estate transactions, as it ensures that both buyers and sellers have a clear understanding of what a property is worth in the current market. It serves to protect both parties by providing an objective assessment, which can help prevent overpricing or underpricing a property. While estimating potential rental income or verifying transaction details are important aspects of real estate, they do not capture the primary purpose of an appraisal, which focuses specifically on determining property value.