What is a common purpose of an appraisal in real estate?

The primary purpose of an appraisal in real estate is to establish property value, which is why this choice is accurate. An appraisal is a professional assessment of a property's worth based on various factors, such as its condition, location, and comparable sales in the area. This valuation is crucial for multiple scenarios, including sales transactions, refinancing loans, and investment decisions.

By determining the fair market value of a property, it helps buyers, sellers, and lenders make informed decisions. For instance, a seller might need this information to set a competitive asking price, while banks rely on appraisals to assess risk when approving a mortgage loan.

In contrast, property tax rates are influenced by local government assessments, and while an appraisal may inform these rates, it is not their primary purpose. Listing prices can be influenced by appraisals, but setting them is a broader process that may include market conditions and seller strategies. Verifying ownership usually involves legal documents and title searches rather than an appraisal.