What does an appraisal in real estate assess?

An appraisal in real estate primarily assesses the market value of a property. This process involves a professional appraiser evaluating various factors related to the property, including its condition, size, location, and recent sales of comparable properties in the area. The appraiser utilizes standardized methods and tools to arrive at a fair market value, which reflects what a buyer is likely willing to pay and what a seller would be willing to accept in the current market.

While other aspects such as the condition of the neighborhood, potential rental income, and the history of the property may be considered in the overall context of the property, they do not directly determine the market value as specifically as the appraisal does. The market value assessment is crucial for various stakeholders, including buyers, sellers, lenders, and investors, as it informs financial decisions related to real estate transactions.