What is one purpose of assessing property value through appraisal?

One of the key purposes of assessing property value through appraisal is to inform financing decisions and negotiations. When lenders consider providing a mortgage or a loan, they often require an appraisal to determine the market value of the property. This value indicates how much the property is worth and supports the decision on the loan amount. It also plays a crucial role during negotiations between buyers and sellers, as it provides an objective estimate of value that can influence offers and counteroffers.

In addition to financing, the appraisal can affect the overall real estate transaction process, offering insights into whether listed prices are reasonable. Thus, a property appraisal serves as a vital tool in the decision-making framework for potential buyers, sellers, and lenders, ensuring that financial transactions are grounded in accurate property value assessments.