In order to sell your house, one of the first steps is calculating how much it’s worth – so what’s the difference between an appraisal vs valuation?

Regardless of whether you’re looking to offload an investment property, downsize into a smaller abode or transition into your dream home, the aim of the game for just about every seller is to get a quick house sale at the best possible price. 

Like it or not, advertising a property for the right price is somewhat of a fine art. Price your home too low, and it could be snapped up within days while you miss out on potential earnings. Price it too high, and you risk being stuck with it for months because you’ve alienated yourself from prospective buyers. 

With all signs indicating that the era of the seller’s market is coming to a close, pricing your property correctly has never been more important – but before you enlist the help of a professional, do you need an appraisal or a valuation?

Comparing An Appraisal vs Valuation For Property 

While you might think your castle is worth a million bucks, chances are that the general public doesn’t. Although a property is technically worth whatever a willing seller is prepared to accept and a willing buyer is prepared to pay for that asset, there’s usually a ballpark figure available based on the type of home, its location, and its inclusions. 

While incredibly important for selling a home, knowing what a house is worth is often required for buyers too. Banks and major lending providers tend to err on the side of caution when it comes to valuing a property. This boils down to the simple fact that they need to know that in the event that you default on your loan, they could potentially recover their money from the sale of said property. 

It’s at this point where the value of a property appraisal or valuation comes in – except that most people simply don’t realise that they’re two separate methods of measuring the true value of a property. 

In simple terms, a property appraisal is a free report prepared by a reputable and experienced real estate agent. In Victoria, they should be a member of the Real Estate Industry of Victoria Association or REIV, and the document is then used as a guide for pricing a property for sale or for rent. 

As real estate agents are usually the first port of call when it comes to assessing the market value of your property and conducting an appraisal, this will often help a vendor decide who to engage with when selling their home. However, the figure will also often be higher than the figure issued by a bank, it’s often a part of the agent’s “sale pitch” to you in an effort to get you signed up to sell with them. 

In comparison, a property valuation is usually much more in depth. Conducted in Victoria by a Registered / Sworn Valuer with a comprehensive criteria of the property itself, a property valuation determines the actual value of a property from an independent and unbiased point of view, and can be relied upon from a legal perspective. When valuing a property, these types of reports generally cover – 

• The size of the property
• The number and type of rooms
• The fixtures and fittings
• The structure and condition of the building
• The standard of the fit-out and the property’s architectural style
• Ease of access to the property
• Planning restrictions and local council zoning
• The property’s location and level of amenity
• The size of the land
• The aspect, topography and layout of the block

When comparing a property appraisal vs valuation, buyers and sellers should keep in mind that while an appraisal can be an incredibly useful tool, it’s just an estimate. For a more legitimate pricing, valuations are ordered when a definitive value is required for a specific purpose, such as a property settlement, dispute resolution, financing a property purchase, and even deceased estate settlements. 

Should you be looking to sell your home or purchase a new one, enlisting the services of a free property advisor like ESPA can often be a game changer. As an example, your advisor would likely research the property, local agents, check the zoning, evaluate market conditions, and communicate clearly with you regarding all of your options – but where do you find one?

Taking The Stress Out Of Selling Property 

As a completely free service, Emergency Services Property Advisors provide property advisor services to Police, Fire, Ambulance and S.E.S personnel and their families right across Victoria.

Luke and the team at ESPA are passionate about providing support to some of Australia’s most valued public servants. Along with key industry insights, ESPA also works with a broad range of service providers linked to the real estate industry such as conveyancers, trades, legal practitioners and mortgage brokers.

If you are an emergency services worker looking to potentially buy or sell property in the future, please get in touch with Emergency Services Property Advisors today to discuss how we can turn your real estate dreams into reality, or call Luke directly on 0414 757 705.