22/08/2023
What is a property appraisal, and what is it used for?
A property appraisal is an informed opinion of how much an owner would receive for a property if they listed it for sale in current market conditions. Usually performed by a real estate agent, an appraisal should generally only be considered an estimate, and real estate agents don’t usually charge for carrying them out.
An appraisal isn’t legally binding. However, as property prices change rapidly, it can be an important first step in your process if you’re considering selling. Sometimes a property owner will also ask for an appraisal if they’re renovating, especially if the agent is prepared to give their informed assessment of the home’s changed value pre and post-renovation.
What is a property valuation, and what is it used for?
Unlike an appraisal, a property valuation is a formal, written report that accurately guides a property’s value. Property valuations are carried out by licensed valuers. They are considered so accurate that they will usually stand up in court. For this reason, a formal property valuation is often used in wills and deceased estates, divorce proceedings or property settlements and tax matters.
Banks and other lenders also use property valuations in their risk assessment processes because they can provide a reasonable guide to a property’s value and whether it is suitable security for a loan.
