Property Valuation or Real Estate Appraisal: What Is the Difference?
A formal property valuation and a real estate appraisal may both discuss price, but they are prepared for different purposes and carry different levels of independence and supporting evidence.
What is a formal property valuation?
A formal property valuation is an independent assessment of market value prepared by a qualified valuer. The conclusion is supported by inspection findings, relevant comparable sales, market analysis and an explanation of the valuation approach used.
What is a real estate appraisal?
A real estate appraisal is commonly prepared by a sales agent to indicate a possible selling range. It can be useful when considering a sale, but it is not generally designed for taxation, legal, audit, lending or property settlement purposes.
When is a valuation report usually required?
A written valuation is commonly requested for family law and property settlements, related-party transfers, stamp duty, capital gains tax, deceased estates, SMSF reporting and other matters where an impartial and defensible market value is needed.
Choosing the right assessment
If the purpose is simply to discuss a possible sale, an agent appraisal may be suitable. If another party, adviser or authority needs independent evidence of value, ask whether a formal property valuation is required before proceeding.