Whether you are looking to sell your home or you are simply curious as to how much it’s worth, appraisals and valuations can provide a necessary insight.
According to industry experts, both are vital components to selling a home.
“A market appraisal is essential when selling a home, and agents are required to view a home to provide an appraisal,” The Agency Perth Property Partner Nicola Stacey said.
“This not only ensures the estimate is as close as possible to current local market conditions, it also allows you to choose the right agent for you.
“A valuation is usually conducted by a bank-appointed registered valuer. This is to determine that the house has not been oversold and it is possible for the buyer to sell the property and be able to pay out the mortgage in the future.”
According to Realestate 88 Inner City Sales Executive Michael Adams, appraisals are usually conducted in the beginning stages of selling, when vendors are first deciding to sell their home.
“It is common practice to get one or more real estate agents in to give you an appraisal,” he said. “If you are happy and in agreement, the property will generally go to market.
“Once an offer is accepted on the property and this offer is subject to bank finance, a valuer will often be required to complete a valuation of the home to determine whether the value stacks up to the requested loan amount.”
To determine the value of your home from a market appraisal, Ms Stacey said appraisals were calculated from a list of recent sales in the immediate and surrounding areas, taking into consideration the home’s size, similar features, benefits and land size.
“To put it in simple terms, we add and take for attributes your home may have or not have in comparison to the recent sale we are showing you,” she said.
“A market appraisal is generally more informal to a valuation – a valuation is more specific and valuers by law are able to provide a detailed valuation for banking institutions, insurance companies or any other form to be used for legal purposes.
“A market appraisal is mostly conducted by a real estate representative or agent and do not have the qualification to provide a valuation by law.”
According to Mr Adams, real estate agents rely on their previous selling experience in the area and refer to the database of buyers that are searching for similar properties in the same suburbs.
“A report is then formalised and sent to the owner with all of this information shared, as well as a suburb report that gives the owner insight into where the property sits when compared with the median sales in the area,” he said.
“In both instances, values are calculated using advanced software that show the values of properties sold.”
Mr Adams said valuations were a more accurate way of determining the correct price for your property, as valuers were licensed to determine to property prices for a profession.
“While this is a large part of a real estate agent’s job, and experienced agents should always provide accurate appraisals, there may be information that can be picked up by valuers, which real estate agents won’t have access to,” he said.