You've had your property appraised by a real estate agent, and you're thrilled with their selling estimate - until your valuation report comes back, and it's $70,000 lower than the agent quoted. So what is your property really worth?
It’s an issue that real estate agents deal with on a daily basis as many people don’t understand that there is a difference between a valuation and an appraisal.
A formal valuation can only be conducted by a qualified valuer who has undertaken prescribed education and training in this field, to ensure that they take into account all of the features and issues relating to a particular property. “Valuing is a complex task and will take some time to complete.”
A formal, professional valuation undertaken by a registered valuer will take into account several relevant property features, such as:
Building structure and condition
Any building/structural faults
Features of the home
Caveats or encumbrances on the property
Local Council zoning
Generally, you will pay around $3-$500 for a professional valuation. For this fee you will receive a written report detailing the value of the property, along with explanations of how and why this value was determined.
Why do I need a valuation?
Valuations are required in situations where a definitive value is needed. Reasons for this include a property settlement, obtaining finance from a lending institution, or establishing the value of a deceased estate. A Court may also order that a valuation be obtained as part of the process of resolving a dispute.
Appraisals are intended purely as a guide, and can be carried out by real estate professionals.
Appraisals are estimated by knowledge of the local area and recent sale prices, and they should only ever be used as an estimate of price.
Why do I need an appraisal?
If you’re planning to sell your home or investment property, an appraisal from one or more qualified real estate agents can provide you with an indication of what your property is likely to sell for.
Just make sure you approach real estate agents who are familiar with your suburb. A real estate agent who usually works in a different area might not know the local micro-market as closely, and they may therefore give you an appraisal that is much higher or much lower than the market can realistically support.