What is one of the key functions of an appraisal?

One of the key functions of an appraisal is to establish the fair market value of a property for the lender. This valuation is crucial in the mortgage lending process, as it helps determine how much a lender is willing to offer for a mortgage based on the property's worth. The appraiser evaluates various factors, including the property's condition, features, and comparable sales in the area, to provide an unbiased assessment of its value. This information is essential for the lender to ensure that they are not over-lending on a property and that it serves as adequate collateral for the loan. Establishing a fair market value is vital in protecting both the lender's investment and the buyer's financial interests.