When selling your property, it’s likely that you will need to call on the advice of several experts. Market appraisals and valuations are both important parts in real estate, and will help you make the right decisions. While the names may suggest they do the same thing, they are noticeably different.
To help you get the advice you need, below, we’ve cleared up the differences between the two to help you.
What is a market appraisal?
A market appraisal is a great way to get a feel for the market for sellers. When asking your agent what your property is worth, you will receive a market appraisal. This is the agent’s expert opinion on what they believe they will be able to sell your property for, if you were to list with them.
The number they give you will be calculated using the agent’s knowledge of the market in the area, including consideration of:
- Recent sales of similar properties.
- Demand for property in the area.
- The direction in which prices are heading.
- The agent’s expert opinion on how buyers will react to your home.
You must remember that appraisals are only intended as a estimate or guide as to how much you may be able to sell for, it has no legal standing. Our appraisals are usually fairly casual, and are used to help you get an idea of how we work, who our agent is and what we can do for you and your property.
What is a property valuation?
Property valuation is a term that can refer to informal appraisals and estimates. However, it most commonly refers to a formal process whereby a qualified profession will provide a detailed report including the estimated value of a property, as well as the reasoning behind that value.
To decide on this figure a valuer will consider the property’s
- Location and aspect.
- Building structure and condition.
- Features of the home.
- Land size and quality, and more.
Usually valuations are requested by banks and lenders before they approve a mortgage to buy a new home, or refinance your current mortgage. They do this to ensure that if you default on your loan they have adequate security to recoup their losses and for that reason they’re often lower, or more conservative than market appraisals.
If you’re unsure whether you need a formal property valuation or a market appraisal, remember as a rule of thumb: if you’re selling you need an appraisal, if you’re buying you may need a valuation.
For a no obligation appraisal of your property get in touch with us today.