What does a home appraisal determine?

A home appraisal is a professional assessment of a property's value conducted by a licensed appraiser. Its primary purpose is to determine the market value of a home, which reflects what the property would likely sell for in the current real estate market. This assessment takes into account various factors, including the condition of the property, recent comparable sales in the area, and current market trends.

Establishing the market value is crucial for several reasons, particularly in the context of buying and selling properties, as well as for lenders when determining how much to loan a borrower for a mortgage. The appraised value can influence how much a buyer is willing to pay and how much a lender is willing to finance.

Other aspects mentioned in the options, such as historical price, insurance value, and the sale price set by the homeowner, do not accurately reflect the purpose of an appraisal. The historical price is more about past transactions and does not depict the current market scenario. The insurance value may be set according to different criteria, focusing on the replacement cost rather than market conditions. Lastly, a homeowner's set sale price may be based on personal needs or perceptions rather than a factual appraisal of market value, which is an objective assessment made by a professional. Therefore, the answer indicating