A home appraisal value should not be confused with a valuation.
Home appraisal values are provided by a Real Estate Agent. This is the agents’ opinion of the sale price that you could expect to achieve in the market. It is the agents’ opinion of the current market value of your property. Many agents promote their ‘Free Appraisal Service’ however in NSW it is illegal for a real estate agent to charge you for this service
A valuation, on the other hand, is a service that is provided by a Registered Valuer. Depending on the borrowing power of the purchaser, the bank will normally request that a valuation be done.
Home appraisal values are free. However, a valuation provided by a registered Valuer will generally cost you in the vicinity of $500. If this is required as part of the borrower’s loan approval it will be built into the buyer’s loan costs and is not an expense that the seller needs to pay.
So how do you get a home appraisal value that is accurate in today’s market?
Most commonly you can ask a local agent to give you an estimate. Whether it is the local real estate agent providing an appraisal value or a registered valuer giving a valuation, they will usually view any recent sales history of properties similar to yours. They will assess the land size, age of the home, the number of bedrooms, bathrooms and garages as well as the features and benefits of the property. They will take into account the age of your kitchen and bathrooms, any renovations and improvements that may have taken place and calculate a figure taking all of this into account.
Often owners will try to calculate their own house appraisal values. They will grab the local paper, jump on the internet and look at the advertised properties and make an assessment. The problem here is that the homes advertised in the paper have not yet sold. How do you know that the property down the street or in the paper is not overpriced? The only way to be sure of a property’s value is after it has sold.
If you would like to obtain a home appraisal value for your property, find an agent who knows the market, has sold many properties within the local area, is credible within the local community and one that has great references from past and current clients. If they are credible they will not only give you a realistic price but will also be able to justify that price to you by showing anecdotal evidence of actual sale prices achieved recently and how and why those properties compare to yours.
So find a trusted agent, get them to justify their opinion of price and keep an open mind.
Be wary of any agent who gives you a price that they cannot back up with recent sales of homes that are similar to yours. There are some unethical agents who will provide you with an inflated figure just to get your business.