What is a primary purpose of an appraisal report?

The primary purpose of an appraisal report is to establish a likely market value for a property. This valuation is crucial for various stakeholders, such as buyers, sellers, lenders, and investors, as it provides an objective assessment based on the property’s characteristics, the surrounding market conditions, and comparable sales data.

The appraisal process considers factors like location, size, condition, and unique features of the property to arrive at a fair market value, which is essential for making informed decisions in real estate transactions. This value helps lenders assess risk when approving mortgages and provides buyers and sellers with a realistic understanding of what the property is worth in the current market.

In contrast, while documenting property conditions for future sales or commenting on property ownership may also be part of an appraisal’s broader context, these do not represent its main goal. Similarly, an appraisal is not designed to persuade buyers, as it aims for objectivity and impartiality rather than marketing a property.