What's the difference between a Market Appraisal and a Property Valuation?
The difference between a Property Valuation and a Market Appraisal
The difference between a Market Appraisal vs Property Valuation is important to understand. A Market Appraisal gives you an indication from a Real Estate agent as to how much your property would sell for on Canberra’s current market, whereas a Property Valuation is a legal value used to get finance through your bank.
It’s common to get free market appraisals from Real Estate agents when you’re planning to sell their home. The agents you shortlist give their appraisals and recommend a listing price. You may be surprised to find that the value of your house according to different agents may be quite different. If these appraisals are in a small price range, a good conclusion is that the value of your home being suggested is accurate.
If the market appraisals you’re given by different agents vary greatly, it becomes a confusing situation. It’s tricky to decide which appraisal is most accurate. However, there is no need to worry as there are other ways of knowing the fair market value of your house. In addition to market appraisals, you can research the value of your house through:
- Property valuations provided by an independent valuer
- Estimates provided by online sources, such as our free Online Property Estimate
Online estimates can give you a rough idea of the value of your property. Using the data that is available on sales of similar properties in your area, computer algorithms come up with an estimated value of your home. In fact, using an online tool, you can get a rough estimate on the value of your property in mind before asking a Real Estate agent for a market appraisal.
How are the values for Market Appraisals and Property Valuations calculated?
How does an agent perform a market appraisal?
Real Estate agents make a sincere and honest attempt to find out the value of a house. They take a close look at the condition, size, location, and features of your house. They compare it with prices of recently sold comparable properties in your area. If comparison data is not available, they adjust based upon their experience and decide on a figure that they think is fair market value of your house. However, market appraisal remains an estimate only as it involves guesswork and adjustments based upon the experience of the agent.
Property valuation is a legal and formal procedure
Property valuation is a more legal and formal procedure to determine the value of a property. It is carried out by a valuer who is an independent professional and works on behalf of banks and other lenders. Property valuation takes a closer look at the property and its features to arrive at a very accurate value, however this looks at your property from a risk perspective and may not necessarily be the full amount you could get in the current market.
Property valuations can cost you around $500 whereas market appraisals can be obtained for free from any licensed Real Estate agent. If you believe the agent is honest and reliable, you should be able to organize a free market appraisal.
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