What is the purpose of a property appraisal?

The purpose of a property appraisal is to assess the fair market value of a property. This process involves a professional appraiser analyzing various factors such as the property's condition, location, features, and recent sales of comparable properties in the area. By determining this value, stakeholders—including buyers, sellers, and lenders—can make informed decisions regarding pricing, financing, and investment strategies.

In contrast, assessing rental prices focuses on market demand, comparable rental listings, and lease terms rather than overall value. Evaluating a property for insurance involves checking its condition and features to establish coverage rather than determining value for sale or purchase purposes. Establishing the history of previous buyers does not provide an assessment of the property's current market value, as it is more about recording transactional history than valuation. These distinctions highlight why assessing fair market value is the core objective of a property appraisal.