What is the primary purpose of an appraisal in real estate?

The primary purpose of an appraisal in real estate is to establish the market value of a property. This process involves a professional appraiser assessing the property based on various factors such as its location, condition, size, and recent comparable sales in the area. The appraised value is crucial for various transactions, including buying, selling, financing, and tax assessments.

Establishing market value serves several important functions. For buyers and sellers, it provides a fair assessment of what the property is worth, helping to facilitate negotiations. For lenders, the appraisal informs the decision regarding how much they are willing to lend and ensures the property's value justifies the mortgage amount. In short, the appraisal is a key component in the real estate process, ensuring that all parties involved have a reliable evaluation of the property’s worth.

The other options, while relevant to real estate, do not define the primary purpose of an appraisal. Determining the amount owed on a mortgage primarily involves review of loan balance and payment history rather than property value assessment. Estimating repair costs is more related to property inspections rather than appraisals. Verifying a buyer's identity focuses on the identification process rather than the property's value.