When you put your home up for sale, you’ll probably have a real estate agent carry out an appraisal. This may result in a figure that you’re happy with, but you’ll find that most lenders carry out their own valuations. Often, your valuation will be less than the appraisal figure. To understand why, you need to know about the differences between an appraisal and a valuation.
A real estate agent will carry out an appraisal of your property to give you a rough guide to its selling price. This means they’re estimates. Your agent will take several factors into account when creating an appraisal. For example, they’ll look at recent sale prices in your area and combine that with their own knowledge of the location. The key thing to remember is that an appraisal has no legal bearing. You don’t even need to have one to sell your property. However, many sellers choose to so they can get an idea of the state of the property market ahead of their efforts to sell. Need a home loan?UNO. The new way to get a better deal. Get Started ### What is a Valuation? A valuation is a much more formal process. Lenders will use the services of a valuer to get a precise figure for the value of your home. This allows them to determine the size of the home loans that they will offer to any potential buyers. Valuers must complete extensive training to develop the skills they need to come up with accurate valuations. As a result, they’re better at taking every factor related to the property into account when coming up with a number. These factors include all of the following:
You will need a valuation in several circumstances. For example, you’ll need one if you want to refinance your home loan, or if you’re settling the sale of your property. You may also need to carry out a valuation to determine the value of the estate a loved one leaves behind when they pass. Appraisals are a different matter. You don’t need to get an appraisal before selling your home. However, they can reveal certain things that may prove useful to you. For example, an appraisal will give you a general idea of the state of the property market. Furthermore, you can use appraisals to choose between real estate agents. If one agent’s estimate is out of line with all the rest, that agent may have just highlighted a lack of knowledge about your local area. There’s no reason not to get an appraisal before a valuation. Most real estate agents offer appraisals without any charge, so take advantage of them.
You may be getting valuations and appraisals if you’re thinking of selling your home. However, you may also need them if you choose to refinance your home loan. If you want to do the latter, make sure you follow these steps:
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