Valuation vs. Appraisal: Understanding the Difference

Real estate professionals are frequently asked whether there is a difference between a valuation and an appraisal. While both provide insight into a property's worth, they serve different purposes and are conducted by different professionals.

What is a Valuation?

A formal valuation can only be carried out by a qualified valuer who has undertaken accredited education and professional training. This ensures all relevant features and legal considerations are thoroughly assessed. Valuations are detailed and complex, requiring time to complete accurately.

A valuation typically takes into account:

• Location of the property

• Building structure and overall condition

• Any structural faults or issues

• Features and layout of the property

• Zoning regulations

• Caveats or encumbrances

• Additional features (especially for rural properties)

The result is a comprehensive written report providing a definitive market value, and a fee is charged for this professional service.

Valuations are legally recognized and required when an accurate value must be established. Common situations include:

• Property settlements (e.g., divorce or family division)

• Securing financing from a bank or financial institution

• Establishing value for probate or deceased estate purposes

• Court-ordered disputes requiring expert valuation evidence

If you need a legally valid and objective assessment, always engage a licensed valuer to ensure accuracy and peace of mind.

What is an Appraisal?

An appraisal is a more informal estimate of market value, typically offered by real estate agents. It’s based on local market knowledge, recent sales in the area, and current property trends.

Appraisals are:

• Free of charge in most cases

• Not legally binding

• Used by property owners to understand likely sale price

• Suitable for potential vendors seeking a market overview

Appraisals are helpful, but they do not replace a formal valuation when an authoritative figure is needed.

Need Help?

 If you’re unsure whether you need a valuation or an appraisal, speak with us. We can guide you appropriately and, if necessary, refer you to a reputable, area-experienced valuer to ensure you get a reliable and accurate assessment of your property’s value.