What is the difference between an appraisal and a property valuation?
Both appraisals and valuations are methods used to help determine the market value of the property you are wishing to sell. Before deciding on whether you want to have an appraisal or a property valuation it is important to understand how both of them work to determine which process will be most beneficial.
What is an appraisal?
Appraisals can be loosely described as a guide to what the true value of your property is. The aim of an appraisal is to assist you as the seller with a rough idea of where your property sits in the market, providing an idea of the possible selling price.
An appraisal is carried out by a real estate agent and is generally free of charge. The actual value figure is calculated based on the real estate agent’s own understanding of the market you are selling in combined with their assessment of your home, land, house position and quality of the build.
Arranging for an appraisal on your property is generally a quicker process than a valuation, with no formal process to go through, but it is important to remember that an appraisal should only ever be used as a guide and not a definitive value.
To get the best appraisal possible, always choose a real estate agent that is local as they will have a better idea of the market in your particular area. In most cases, an appraisal will not cost you anything, however, you should check with your agent if they charge a fee before having it completed, just to avoid any nasty surprises.
What is a valuation?
A property valuation is generally conducted when a definitive value of the property is required. Unlike an appraisal which can be completed by any real estate agent, a formal property valuation can only be undertaken by a qualified valuer who has had all of the appropriate training.
A formal property valuation is an impartial calculation of the value of a property that takes into account factors such as the size and aspect of the property, the land the property is on, number of bedrooms and bathrooms, quality of the building materials, council zoning of the house, features of the home, the condition of the property, any hidden property damage, environmental risks to the property as well as the influence of the market on the sale price of the property.
A valuation of your property will also involve looking at similar properties in your area and property sales in the past six months to a year to help create a conservative calculation of the value of your property.
Unlike an appraisal, a formal property valuation is an in-depth process that requires a qualified professional, it will usually set you back around $200-$600.