Valuations are sometimes disputed on the grounds that a real estate agent has provided an appraisal which is higher than the valuation figure. Real Estate Agents are aiming to get the best price they can for their client (the seller). This is their job. Their appraisal often represents what they hope to achieve for the property if the right buyer comes along at the right time.
Here we’ll discuss the difference between a Real Estate Agent’s appraisal and a property valuation provided by an accredited Property Valuer.
An appraisal and a valuation are two documents created for different purposes. A real estate agent uses expert local market knowledge to determine a price tag for selling a property. An independent valuation carried out by a Certified Practising Valuer can be for a wide range of clients to satisfy a wide range of purposes, including mortgage and refinancing, financial reporting, family law matters, renovation, Capital Gains Tax, calculating Stamp Duty, development feasibility and more.
A property valuation should not be confused with an appraisal carried out by a real estate agent. An agent’s appraisal is not a sworn legal document and does not hold the weight of a valuation completed by a Certified Practising Valuer. A valuation report, conducted by an accredited valuer, is an official legal document. Unlike a valuer, a real estate agent is not required to defend their appraisal of a property’s value in a court of law.
A property valuation report is more detailed than an appraisal. The valuation report will include the full description of the property and the location, the market segment, the value of the property, a rental assessment, replacement insurance assessment, map, photographs and an assessment of recent sales in the area. An agent’s appraisal is also known as a CMA – Comparable Market Analysis. Often this is computer generated with limited input from the agent.
A formal valuation can only be conducted by a qualified valuer and is required in situations where a definitive value is required.
In our experience, few people understand what a property valuer does and the qualifications required of a valuer. The minimum requirements to practice as a valuer varies from state to state. As an example, to practice in Queensland, a valuer must:
- complete a four year university degree (e.g. Bachelor of Property Economics)
- complete two years of practical experience under the direct supervision of a senior valuer
- pass a professional interview with a panel of valuation industry leaders.
- undertake twelve modules prepared by the Australian Property Institute and undertake the accompanying tests
In Queensland, a person can complete a one week course to become a registered real estate agent.
If we can assist you with an independent property valuation please contact us on 1300 302 581 or email@example.com.