What is a common purpose of a home appraisal?

The common purpose of a home appraisal is to determine the fair market value of the property. This valuation is crucial in numerous scenarios such as buying, selling, or refinancing a home. The appraisal process involves a thorough evaluation of the property’s condition, features, location, and comparable sales in the area to arrive at an unbiased estimate of its value.

Knowing the fair market value helps sellers set a reasonable listing price and assists buyers in making informed offers. Additionally, lenders rely on this valuation to ensure that the amount they lend is justified by the value of the property, thereby mitigating their risk. This makes determining fair market value a foundational aspect of real estate transactions and financing decisions.