When someone wants to buy or sell a house, they need to know how much it’s worth. Home appraisals and valuations are methods used to determine the value of a home, but they differ in terms of how they are done and their purposes. We’ll help you understand the difference between these two.
What is a Home Appraisal?
A home appraisal involves a certified appraiser physically visiting the property and considering various factors to determine its value. The appraiser visits the house and looks at different things like the size of the house, how many bedrooms and bathrooms it has, what condition it’s in, and what similar houses in the area are selling for. They use all this information to figure out how much the house is worth.
Home appraisals are primarily used during real estate transactions, such as when someone wants to buy or sell a home. Lenders usually require an appraisal to ensure the property’s value aligns with the loan amount being requested. It helps determine the fair market value of the home, which influences the loan approval and terms.
What is a Home Valuation?
A home valuation (often referred to as a market analysis), on the other hand, is kind of like a guess or an estimate of how much the house might be worth. Instead of having an appraiser visit the house, a valuation is often done by looking at similar houses that have recently sold in the area. The person doing the valuation relies on data analysis and comparisons to similar properties to estimate the value.
Home valuations are often used for initial estimates or preliminary assessments of a property’s value. They can be helpful for homeowners looking to understand the value of their home, real estate agents determining listing prices, or individuals conducting research on the market value of properties.
Is One Better than the Other?
Appraisals involve a detailed assessment by a certified professional but take around one to two weeks. Valuations typical take only about 15 minutes to an hour by a property surveyor. It is recommended to use each for the purpose they serve for.
Both appraisals and valuations are important because they help people know how much a house is worth before buying or selling it. The information from the appraisal or valuation can help the buyer or seller decide on a fair price for the house.
Hope that helps you know more about some commonly used real estate terms. Need help with home appraisal or valuation? We can refer you to trusted professionals. Feel free to reach out.