Are you wondering about the difference between valuation and appraisal? When it comes to property transactions such as buying, selling, or renting out a property, understanding the value of your property is a wise financial decision.
However, it is important to know that property valuation and appraisal are two different services that provide different results. Each process has a unique purpose and outcome, so understanding these differences is important if you are planning to buy or sell a property.
In this blog, you will learn the difference between a property valuation and a property sales appraisal, what each process entails, and who can provide each service.
What is a property appraisal?
To begin, let’s define what a property appraisal is. An appraisal is an estimate of the value of a property provided by an experienced real estate agent. If you’re thinking of selling your property, an appraisal can give you a solid indication of how much your property could sell for, making it a valuable tool to have in your arsenal.
A real estate appraisal takes into account factors such as recent sales of similar properties in the area, the condition of the property, street appeal and any renovations or upgrades that have been made. If you’re thinking of buying or selling a property or refinancing your mortgage, you may need to obtain an appraisal.
Why would you need a property appraisal?
As a property owner, you may wonder why you would need a property appraisal. The answer is simple: It’s the best way to gauge the local market when planning to sell or lease your property. Although an appraisal isn’t a definitive value, it provides you with an estimate of how much your property could sell for. This information is crucial when making decisions about selling your property.
Property appraisals are an opportunity to gain valuable insights into your property’s worth if you are:
- Considering an investment property purchase
- Upgrading or downsizing your family home
- Renovating and want to find out how your upgrades have impacted its value
Overall, getting a property or rent appraisal can be an excellent tool for sellers or landlords looking to understand the local real estate market.
Who can provide a property appraisal?
In Australia, property appraisals are conducted by licensed real estate agents.
When getting your property appraised, make sure to work with a local real estate agent who has a good understanding of the area and recent sales. Avoid using a real estate agent who normally works outside of your area, as they may not provide an accurate estimate.
At HKY Real Estate, we have a team of certified real estate agents who offer professional, accurate, and timely property appraisals.
When should you get a property appraisal?
While appraisals are estimates rather than definitive values, they are still incredibly helpful in gauging the local market.
As a homeowner, it’s important to know the value of your property, especially if you’re considering selling. That’s where a property appraisal comes in. Not only can it help inform your decisions when it comes to putting a selling price on your home, but it can also give insight into the current market and how your property stacks up against others in the area.
It is advisable to have a property appraisal conducted before listing your property for sale as it helps to determine a fair and reasonable asking price.
But appraisals aren’t just for sellers. If you’re planning on renovating your home, an appraisal can help you understand which upgrades will yield the greatest return on investment. If you’re in the market to buy an investment property, understanding the equity you have in your current property can be a valuable tool in your financial planning. Regardless of your situation, getting a property appraisal can provide clarity and confidence in your real estate decisions.
What is a property valuation?
Property valuations are performed by experienced professionals who assess a property’s market value based on several factors. They compile a detailed report which looks beyond just its location and size.
A qualified valuer inspects the property in person, taking into account important details such as zoning, land title, to the physical condition of the property itself. As well as identifying any easements or encumbrances.
Once the valuer completes their assessment, they’ll compile a comprehensive property valuation report that outlines the property’s true market value.
Why would you need a property valuation?
Valuations are essential for various reasons.
- Looking to get a home loan, refinance, or calculate your equity? Market value is a key factor in determining the loan amount.
- Are you going through a property settlement? A valuation can ensure that both parties are receiving a fair split.
- If you need to prove the value of a deceased estate or are in dispute resolution, a property valuation is essential.
- For property investors, it’s crucial to have a reliable valuation to ensure they are not overpaying or undervaluing a property.
- Property valuations are also useful in cases of divorce, deceased estates, legal disputes, and insurance purposes.
- If you’re selling or buying a property, a valuation can provide you with an accurate figure.
Who can provide a property valuation?
In Australia, a property valuation can be conducted by a licensed property valuer or a certified practising valuer (CPV). It’s critical to partner with a valuer who has experience in valuing properties in the relevant area and can provide accurate and impartial advice.
When would you get a property valuation?
If you’re buying a house and planning to apply for a home loan, it’s highly likely that you’ll need to get a property valuation. These valuations are mandatory for most lenders, as they need to know the accurate value of the property before approving your loan.
Property valuations can also come in handy when dealing with family or partnership settlements, helping to ensure that all parties involved receive a fair deal. Additionally, a property valuation is often necessary when calculating capital gains tax or obtaining a building insurance policy.
Property owners should get their properties valued every three to five years, or when they plan to sell, refinance, or update their insurance policy.
Expert real estate appraisal for your Perth property
Understanding the difference between a property appraisal and a valuation is important when it comes to making wise financial decisions about your property. If you’re a homeowner, buyer, or landlord in Australia, consider obtaining a property appraisal or valuation to gain a better understanding of your property’s value.
If you’re in need of experienced professionals to help with your property appraisal, contact the team at HKY Real Estate for expert guidance and support.
Difference between valuation and appraisal FAQs
In general, property appraisals are free of charge while property valuations incur a fee.
Getting a property valuation is essential for several reasons. Here are some reasons why you should consider getting a property valuation:
- To determine the market value of a property for sale or purchase.
- To assess the value of your property for refinancing purposes.
- To determine the value of your property for estate planning.
- To establish the value of your property for taxation or insurance purposes.
Have more questions?
