Appraisals and valuations are used to determine the market value of the house, and the terms are often used interchangeably. If you're thinking about selling a property, a valuation may not be ideal for your purposes due to the conservative nature of the assessment - but what exactly is the difference between the two?
What’s a property valuation?
A valuation is the more formal of the two processes and tends to be more conservative as it is used for legal or banking purposes rather than for selling a home. To obtain a valuation, a formal report is created by an accredited valuer who has gone through the necessary training successfully. This report is done over 2-3 business days and contains a thorough breakdown of the features of the property, including:
- Land size (m²)
- Number of rooms
- Risk ratings
- Local zoning
- Condition of the property
These are the baseline criteria that are always included, but it can include other aspects as well. Another key difference between valuations and appraisals is that valuations can be used in legal matters, such as when applying for a mortgage on your property, establishing estate value, etc.
A court can also request a valuation be done to resolve property settlements or other disputes. Since this is a more official evaluation that takes time and certain qualifications, there is usually a $300-$500 fee associated with property valuations. Afterwards, you will receive a report on the value of the property, the breakdown described above, and explanations for each segment’s value assessment.
What’s a property appraisal?
Appraisals are to be used as more of a guide to property value, and allows you to get a better understanding of a possible selling price.
An appraisal can be carried out by any real estate professional with no fee for the service. The process of an appraisal is based on the real estate professional’s knowledge of the market in the area and their assessment of the property.
When you get an appraisal from an agent who does home appraisals in your area, they will have background knowledge of the prices that other homes in the area have gone for and can give you an estimate based on their professional experience. Getting a house appraisal is also much faster than a valuation because there are no formal criteria involved.
How are appraisals determined?
Since appraisals are based on the opinion of one professional, you might also like to gather a few appraisals from different sources. When you’re selling one of your biggest assets, it’s worthwhile meeting with 2-3 agents to determine who you feel most comfortable with.
A property appraisal is the perfect starting point for the process of selling a house. It’s also a great way to start a dialogue with potential agents, compare real estate commission vs fees, and get tips on selling your home.
To book your free house appraisal, get in touch with Upside today. Upside will sell your property for a low flat fee, while providing all the service you’d expect from a traditional agent, plus more.