The Difference Between a Valuation and an Appraisal

When you’re putting your home on the market, you need to have a good idea of it’s value. There’s a number of ways of finding this out, and in this vlog Henry talks about the differences between a valuation and an appraisal. Here’s what he has to say:

Hi, I’m Henry Wong for Remax United Vision, and we’re here today to, I guess, explain the difference between a valuation and an appraisal from an agent. Now, we’ll start with a valuation. A valuation is when a bank sends out a valuer or you yourself pay for a valuer. So, a valuer is someone or a company that is actually degree-qualified and has insurance. So, what they do is they go out to the house, they come, they physically measure, and then they compare with other similar sold properties, and they come out with a figure. That’s a valuation. Now, what’s not a valuation is sites like OnTheHouse.com.au, the banking apps. These are called estimates because they’re basic calculations on the medium price.

Now, let’s look at the other side of the coin. When you get an agent that has, I guess, a track record, that sells quite a lot in the area, what they do is… how they figure out the price of your home, obviously, is based on what sold in the past, just like valuers, they also look at what’s currently on the market, and what has recently sold, I guess, three, four weeks ago. You see, sometimes with valuers, they can only base on what sold in the past, but they do not have a record what sold two weeks ago because that’s not on RP Data. There’s actually not an official record yet. So, when you’re getting an agent to come through, you will get, generally, a more accurate picture as to what a buyer’s willing to buy, or what the buyer’s willing to pay for because, at the end of the day, the best evaluation is a contract on your home.