Tag 1 of 6 · The two words
Appraisal or valuation?
An appraisal is a real estate agent’s broad estimate of what a property might sell or rent for, given to inform buyers, sellers and tenants. A valuation is a valuer’s assessment, which Queensland’s regulator describes as one that can be relied on for financial decisions and for legal or statutory requirements, and under its law only a registered valuer may make one.
General information, not legal or financial advice. Rules differ from state to state. Check with your state’s regulator, such as the Valuers Registration Board of Queensland or Consumer Affairs Victoria.
Two people, two jobs
The Valuers Registration Board of Queensland, the state’s property valuation regulator, draws the line in two short paragraphs. On one side, it says giving an estimate of a property’s sale price or rent is standard practice for a real estate agent, as information for buyers, sellers and tenants. On the other, it says only a valuer registered under the Valuers Registration Act 1992 may lawfully value real property in Queensland.
The Board adds that a registered valuer has tertiary qualifications and work experience, and must be of good fame and character. It also says that where a valuation is made for a financial decision, or a legal or statutory requirement, by anyone not registered as a valuer, this contravenes the Act.
| Question | Appraisal | Valuation |
|---|---|---|
| Who gives it | A real estate agent, as standard practice. | A valuer registered under the Valuers Registration Act 1992. |
| What it is | A broad estimate of what a property might sell or rent for. | In the Board’s words, “an unbiased and independent assessment of value”, which can be relied on for financial decisions and legal or statutory requirements. It can include a rental value. |
| What it can be relied on for | Information for buyers, sellers and tenants. The Board says it cannot be relied on as a basis for a financial decision, legal or statutory requirement. | Financial decisions and legal or statutory requirements. |
| What it rests on | When an agent suggests an asking price, a comparative market analysis of at least 3 similar properties sold within 5km in the last 6 months. | Past sale prices, trends and forecasts, and upcoming projects in the area, set out in a written report. |
Whose side each one is on
An agent selling a home works for the seller. Queensland’s Office of Fair Trading says a seller’s agent is legally required to negotiate the best possible price for the seller. Consumer Affairs Victoria puts the other half plainly for buyers: the agent acts for the seller, yet has to deal fairly and honestly with buyers.
A valuer acts for whoever engages them: Queensland’s list of what to tell a valuer includes who the valuer is to represent, which it says in most cases will be you. The Office of Fair Trading also suggests that a seller look for an independent valuer rather than one with links to the seller or their agent, which it calls a “referred valuer”, and, if a referred valuer is used, to be aware of the relationship. It also says to make sure the valuer is registered with the Valuers Registration Board.
When a seller uses both
The two are not rivals. Queensland’s page on getting a property valuation for sellers suggests doing your own research and considering hiring a property valuer, describing a valuer as one of the best options to understand a home’s true value, and saying the valuer gives a written report that sets out how they reached their conclusion.
Victoria’s list of ways to work out a reserve or asking price includes three steps side by side: get to know prices in your area, “use the agent’s estimated selling price as a guide”, and “consider paying for a valuation by an independent valuer”. In Victoria the agent’s estimate must be reasonable and must take into account the sale prices of the three properties most comparable to the seller’s. How agents must estimate a price sets those rules out for three states.
Fees
Queensland says there is no set fee for a property valuation, and that you should negotiate with your valuer before they start work. In Western Australia, land valuers set their own fees but must disclose, before an agreement, the most they can charge. Neither page puts a figure on it, and nor does this guide.
Reading the word on the page
When a document uses either word, the Queensland Board’s reading is a useful test: an appraisal is a broad estimate for information, and a valuation is a valuer’s work that can carry weight in a financial or legal decision. If a document matters to a loan, a court, a tax return or a family arrangement, the question to ask is who prepared it and under which registration. The regulators in Queensland and Western Australia each keep a public register; Who may value property links both.