fbpx

Property appraisal vs. valuation

  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
Our authors

Published on December 4th, 2020

Last updated on November 25th, 2021



Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

At Savvy, our mission is to empower you to make informed financial choices. While we maintain stringent editorial standards, this article may include mentions of products offered by our partners. Here’s how we generate income.

In this article

A real estate agent has thoroughly examined your property, and all you could hear were words of praise. Of course – you’re over the moon. However, that lasts until you receive your valuation report, and it’s nearly $70,000 lower than the initial sum quoted by the agent.

Hence, you come to ask yourself – what is my property really worth? Is there a way to settle that?

You should know that this kind of issue is common in the real estate market. At least that’s what Michael Brock – president of the Real Estate Institution of SA – affirms. In his statement, he outlined that most Australians don’t differentiate these two concepts – appraisal and valuation. This article is meant to inform you in this direction.

Defining valuations

Brock points that an estimate can only be done by a professional, who has proper training and education in this field. This way, you make sure that he/she considers all the features and underlying issues of the property. He also added that a valuation is a complicated process, and isn’t something one can complete overnight.

A reliable, formal assessment made by a registered professional will consider the following characteristics:

  • Primary features of the home
  • Local council zoning
  • Location
  • Building condition and structure
  • Encumbrances on the property
  • Possible structural or building faults

Typically, a valuation costs somewhere between $300 and $500. You will be handed in a report stating the accurate value of the property, as well as detailed explanations on what determined the value.

Why do I need a valuation?

Such a valuation is a necessity in the case in which you require a definite value for your property: when dealing with a property settlement, or determining the value of a deceased’s estate, or trying to obtain finances from a particular institution, so on and so forth. In the case of a process solving a conflict, such an official declaration might be needed as well.

Defining appraisals

Appraisals are designed as guides, and real estate agents may deliver them. These assessments are typically estimated according to factors such as recent sale prices, local area prices, and others. By definition, Brock outlines that such an appraisal shouldn’t be conveyed as an estimate of price. In other words, they don’t have legal importance; they’re just offered for pure orientation. Typically, they are requested by vendors who want to examine the real estate market.

Why do I need an appraisal?

All this information leads us to the question – why do I need an appraisal? For starters, if you intend to sell your home, an appraisal from a qualified, reputable real estate professional can give you a clear outline of the property’s approximate worth. Nonetheless, make sure that the real estate agent you contact is acquainted with your suburb. If one doesn’t know the conditions in a particular area, the appraisal may not be accurate, and such an outcome is to your disadvantage. The bottom-line? If you’ve made your decision to sell, go for an agent that is familiar with your local area.

Did you find this page helpful?

Yes
No
Thanks for your feedback!
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
Our authors

Published on December 4th, 2020

Last updated on November 25th, 2021



Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

Approval for home loans is always subject to our lender’s terms, conditions and qualification criteria. Lenders will undertake a credit check in line with responsible lending obligations to help determine whether you’re in a position to take on the loan you’re applying for.

The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well as others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.

In this article

Share this article

Share on facebook
Share on twitter
Share on linkedin
Share on email
Share on pinterest

Looking for a home loan?

Compare Australia’s reputed home loan lenders with us and save.

* Terms and conditions and lending criteria apply.

Smart money saving tips

Subscribe to our newsletter.

By subscribing you agree to our privacy policy

Related articles

Easily compare home loan options today

We compare home loan options for you so you can be assured you’re seeing the most competitive interest rates available in Australia.
Want to receive offers, deals and finance tips from Savvy?
Sign up below

We'd love to chat, how can we help?

By clicking "Submit", you agree to be contacted by a Savvy Agency Owner and to receive communications from Savvy which you can unsubscribe from at any time. Read our Privacy Policy.