What is a primary function of a real estate appraisal?

The primary function of a real estate appraisal is to establish the market value of a property. This process involves an objective analysis of various factors that influence a property's worth, including its location, condition, recent sales of comparable properties, and current market conditions. Appraisals are crucial in transactions such as sales and refinancing, where an accurate determination of value is needed to ensure fair pricing and informed decision-making for both buyers and lenders.

Other functions, while relevant to the real estate industry, are not the primary focus of appraisals. For instance, determining the creditworthiness of a buyer is related to the underwriting process in lending rather than appraising the property itself. Similarly, predicting future property values goes beyond the scope of an appraisal, which is meant to provide a current market value rather than forecast trends. Establishing property management strategies also falls outside the realm of what appraisals specifically aim to achieve, as that pertains more to operational aspects of managing properties rather than assessing their value in the market.