Why must the owner complete an appraisal of a property before selling?

The necessity for an owner to complete an appraisal of a property before selling is primarily to avoid underselling the property. An appraisal provides a professional and objective assessment of the property's current market value based on various factors such as location, condition, and recent sales of comparable properties. By having an accurate understanding of the property's worth, the owner can set a competitive price that reflects its true value, thereby maximizing potential returns from the sale.

Understanding market value is crucial for making informed decisions. Without a proper appraisal, an owner might inadvertently set a price that is lower than what the market could bear, leading to a financial loss. An accurate appraisal mitigates this risk, allowing for negotiation room while ensuring that the owner does not miss out on potential profits.

The other options do not directly relate to the primary reason for conducting an appraisal. Proper documentation is essential, but it does not influence the selling price. Addressing potential claims by buyers or comparing with the audit process may be relevant in specific contexts, but they do not fundamentally address the core reason for obtaining an appraisal in relation to the sale price.