What does a "real estate appraisal" primarily determine?

A real estate appraisal primarily determines the market value of a property, which is derived from an analysis of various factors including its location, condition, size, and comparable sales in the area. This valuation process is essential for a range of real estate transactions, such as purchases, sales, and refinancing, as it provides a professional assessment of what the property is worth in the current market.

The appraisal considers multiple criteria, including the property’s physical characteristics, market conditions, and the prices of similar properties that have recently sold. By synthesizing this information, a qualified appraiser can provide a reliable and objective value that stakeholders can use for making informed decisions.

While estimating rental income, historical price trends, and potential property appreciation are important aspects of real estate, they do not encompass the primary purpose of a real estate appraisal. Those factors may be evaluated in market studies or investment analyses, but they are ancillary to the core goal of establishing the market value that an appraisal serves.