What is a real estate appraisal used for?

A real estate appraisal is primarily used to assess the market value of a property. This process involves a professional appraiser evaluating various factors, including recent comparable sales, the size and condition of the property, and its location. The purpose of determining market value is critical in various real estate transactions, as it helps buyers, sellers, and financial institutions understand what the property is worth in the context of the current market.

While determining property taxes, validating the condition of the property, and evaluating rental income potential might involve aspects of the appraisal process, they are not the primary focus. Property taxes are usually based on assessed value, which might not reflect the property's current market value. The condition of the property is part of the appraisal process but serves to support the overall assessment rather than being the purpose itself. Evaluating the rental income potential can be a factor in determining an investment property's value, yet it is not the core function of a standard appraisal. Thus, the main aim of a real estate appraisal centers on establishing the property’s market value.