Appraisals and valuations are used to determine the market value of the house. If you’re thinking about selling a property, a formal valuation may not be ideal due to the conservative nature of the assessment – so what exactly is the difference between the two?
What is a Formal Property Valuation?
A valuation can be more comprehensive of the two processes and tends to be more conservative as it is used for legal or banking purposes rather than considering what a buyer may be prepared to spend. To obtain a valuation, a formal report is created and charges apply as it’s conducted by an accredited valuer who has the necessary qualifications and accreditations. This report is done over 2-3 business days and contains a thorough breakdown of the features of the property, including:
- Land size (m²)
- Number of rooms
- Risk ratings
- Local zoning
- Condition of the property
These are the baseline criteria that are always included, but it can include other aspects as well. Another key difference between valuations and appraisals is that valuations can be used in legal matters, such as when applying for a mortgage on your property, establishing estate value, etc.
A court can also request a valuation be done to resolve property settlements or other disputes. Since this is a more official evaluation that takes time and certain qualifications, there is usually a $300-$500 fee associated with property valuations. Afterwards, you will receive a report on the value of the property, the breakdown described above, and explanations for each segment’s value assessment.
What is a Riverhaven Real Estate Appraisal?
Appraisals are to be used as more of a guide to property value, and allows you to get a better understanding of a possible selling price.
An appraisal can be carried out by any real estate professional with no fee for the service. The process of an appraisal is based on the real estate professional’s knowledge of the market in the area and their assessment of the property.
When you get an appraisal from an agent who does home appraisals in your area, they will have background knowledge of the prices that other homes in the area have gone for and can give you an estimate based on their professional experience. Getting a house appraisal is also much faster than a valuation because there are no formal criteria involved.
How are Real Estate Agents Appraisals Determined?
Since appraisals are based on the opinion of one professional, you might also like to gather a few appraisals from different sources. When you’re selling one of your biggest assets, it’s worthwhile meeting with 2-3 agents to determine, firstly who you feel most comfortable with but more importantly who do you believe has the greater current market knowledge. Pitching the correct sale price can ensure you achieve the best price possible within the required timeframe.
A property appraisal is the perfect starting point for the process of selling a house. It’s also a great way to start a dialogue with potential agents, compare real estate commission vs fees, and get tips on selling your home. Riverhaven Real Estate provides all these services.