Property appraisal and property valuation are usually used alternatively, and a layperson would often consider them as the same thing. Readout this article to know the difference between the two.
People often confuse appraisal and valuation as the same thing. While both of them do help to know the value of a property, there is a vast difference in the method and their uses.
Usually, an appraisal is conducted by an experienced real estate representative. It can be used as a guide to price a property for sale or rent, while a valuation is a detailed report prepared by a Registered Valuer.
An appraisal is generally an estimate or an opinion on the current market worth of the property. It can be used as a guide if you are planning to put the property in the market.
As opposed to it, valuation is a legal document that is prepared by an accredited valuer by taking into account a lot of features about the property.
As per your needs, you can choose whether you want an appraisal or a detailed valuation report of your property.
To make your work easy, we’ve discussed a detailed description of the difference between them both.
To understand the difference, let us first know how both of them work and then you can quickly figure out which one would be a suitable fit for your requirements.
How is an appraisal concluded?
An appraisal is an opinion that assists you if it is the right time to put your property in the market or not.
Real estate agents generally do it for free as it is an informal valuation.
Market prices are very uncertain, and thus it is essential to determine the local market trends if you are planning to place your property in the market.
Real estate appraisal compares your property with similar ones in that locality and also takes factors like style and the area into account.
An appraisal is usually the first step when you visit a real estate representative.
It can be used as an estimate of what value you may receive while selling or renting your property. They do not have legal prominence.
How is Valuation done?
Valuation is a much complex task and requires a lot of time and effort compared to appraisal.
A valuation is a formal report and is conducted by a registered professional. It is a more detailed inspection of the property and usually takes a lot of factors into account during assessment.
It determines the actual value of a property from an unbiased point of view.
Once the valuation is done, you will receive a detailed written report depicting the value of the property and other related information.
A valuer also charges a fee against his services. For legal purposes, valuation took into consideration.
Valuation or Appraisal
It is essential to know when you need a valuation as opposed to obtaining an appraisal for your property.
Now, since you are familiar with the difference between both of them, it is easy for you to decide which one is suitable as per your requirements.
If you are thinking about whether to place the property in the market or not, you will get your answer by getting an appraisal of the property.
But if you want to get an exact and accurate value of your property, you must always go for valuation.
It would help if you kept in mind that appraisals are only supposed to be a guide to pricing your property and can be obtained from real estate agents, complementary.
Appraisals can only be used to obtain an estimate, but if you want to make a deal, it is recommended to get the property valued for definitive results.
For purposes like property settlement, mortgaging, deceased estate settlements or refinancing a property purchase, valuation is a must. Even while settling property disputes, the court also usually orders to get the property valuation report.
Next time when you are dealing with the property market, make sure to remember this difference between appraisal and valuation. And then, as per your requirements, you can decide whether to go for valuation or an appraisal.
Thank you for reading!