What is the primary function of a real estate appraisal?

The primary function of a real estate appraisal is to determine the market value of a property. Appraisals are conducted by licensed appraisers who analyze various factors, including the property's condition, location, and recent sales of comparable properties in the area. This valuation is crucial for various purposes, such as securing a mortgage, buying or selling a property, or understanding investment potential.

In the context of real estate transactions, having an accurate market value helps ensure that sellers price their properties appropriately and that buyers do not overpay. It serves as a professional and objective assessment of worth, making it a vital tool in the real estate market. This valuation process, performed during an appraisal, goes beyond mere estimation; it aims to provide a fair and accurate economic value based on established criteria and standards.

Other options relate to processes or assessments that, while involved in real estate transactions, do not define the core purpose of an appraisal. For instance, property taxes are assessed by tax authorities based on different criteria, while finalizing a sale and negotiating offers depend on market dynamics and buyer-seller agreements rather than the appraisal's primary role.