Valuations and Appraisals – The Difference
It is important to realise that a valuation of a property is not always the same as an appraisal for sale. This will also usually not be the same as a mortgage valuation or a valuation for other purposes such as a divorce settlement or probate valuation.
An estate agent’s appraisal is conducted with a view to setting an appropriate asking price for the property when putting it up for sale on the open market. This may be higher than the actual market value. A valuation is or should be conducted with a view to determining what the property is actually worth. A valuation might also be conducted with a view to determining what the property is worth for mortgage purposes.
A valuation should be based on a specific set of factors. For example, RICS registered surveyors undertaking a formal valuation are required to follow the standards set down in the RICS Red Book. On the other hand, an appraisal may be based on different factors and the individual estate agent’s personal assessment. This can explain why different estate agents may suggest quite different asking prices when carrying out an appraisal.
In Scotland, the Home Report that is required by law when putting a property up for sale will incorporate a mortgage valuation.