· Executive Properties
Owners hear three terms used almost interchangeably: an appraisal, a valuation and an online estimate. They are different things, done by different people, for different purposes.
Online estimate.
An automated estimate from a property portal or data provider. It is generated from past sales and property records, without anyone seeing the home. It can be a useful starting point, but it cannot see the renovation, the view, the condition or the things buyers actually pay for.
Sale or rental appraisal.
An appraisal is a licensed agent's opinion of what a property is likely to sell or lease for in the current market. A good appraisal is based on an inspection and recent comparable sales or leases, and shows you the evidence. It is free, and it is the right tool when you are deciding whether to sell, lease or hold.
Formal valuation.
A valuation is prepared by a licensed valuer, usually for a lender, a court, a family law matter, a tax purpose or a dispute. It follows formal standards, and you usually pay for it. A lender will order its own valuation when you borrow.
Which one do you need.
- Curious about value: an online estimate is a starting point
- Thinking about selling or leasing: ask for an appraisal with evidence
- Borrowing, settling an estate or resolving a dispute: you will likely need a formal valuation
What a good appraisal includes.
- An inspection of the property
- Recent comparable sales or leases, with reasons for each adjustment
- A range, a recommended strategy and the likely timeframe
- Clear notes on what would improve the result
Read what to expect from an appraisal, or book a sale, rental or project appraisal.
Common questions
Is a real estate appraisal free?
Yes, an agent appraisal is generally free. A formal valuation by a licensed valuer is usually paid for.
How accurate are online property estimates?
They are automated and cannot see the condition, renovation or outlook, so treat them as a starting point only.
Do I need a valuation to sell?
Usually not. Most sellers use an agent appraisal backed by comparable sales.
General information only, current at the date of publishing. It is not legal or financial advice. Check the linked official sources or speak to a professional about your situation.