Agent appraisal or certified valuation: what's the difference?

The short answer

A real estate agent's appraisal is an estimate of the price your property might sell for, usually given to win your listing. A certified valuation is an independent, written opinion of market value from a qualified valuer, prepared for a stated purpose and backed by evidence. If a court, the ATO, the State Revenue Office (SRO), or your SMSF auditor will rely on the figure, you will almost always need a valuation, not an appraisal. Check with whoever will receive the figure if you are not sure.

Side by side

What an agent appraisal is good for

Agents see the market every day. They know what buyers are asking about, which homes are attracting interest and how campaigns are going. An appraisal can be useful when you:

• are thinking about selling and want a feel for the likely price range
• want to compare agents and their marketing plans
• are curious about how the market has moved

Most agents do this well. But an appraisal is a sales tool. It is not designed to stand up to close checking by a third party, and it is not meant to.

What a certified valuation is for

A valuation is an independent opinion of market value at a specific date. The valuer inspects the property (unless it is a desktop report), analyses comparable sales, and explains how the value was reached in a written report.

Because it is independent and evidence-based, a valuation can be relied on by other people. That includes:

• the ATO, for capital gains tax and other tax purposes
• the SRO, for stamp duty on transfers between related parties
• SMSF auditors, for annual reporting
• courts and mediators, in family law and other disputes
• executors and beneficiaries, for deceased estates
• municipal councils and professional bodies

Tom Nagy's reports are accepted by the courts, the ATO, the SRO, municipal councils and professional bodies.

Why independence matters

An agent who hopes to be chosen to sell your home has a reason, even if unintended, to give a figure that appeals to you. A valuer has no interest in whether the property sells or for how much. Their only job is to form an opinion of market value that they can support.

That is why authorities and courts prefer valuations. If the figure is ever questioned, the valuer's report shows the sales used, the adjustments made and the reasoning behind the result.

What a CPV qualification means

In Victoria, Certified Practising Valuer (CPV) status through the Australian Property Institute (API) requires:

• a tertiary qualification in property
• two years' full-time supervised valuation practice
• a panel interview with the API Board of Examiners
• ongoing professional development

Tom holds current CPV registration with the API. He also has more than 30 years' experience in real estate and property valuation, having started in Melbourne real estate in the 1980s before completing a Bachelor of Business (Property) at RMIT. That means he understands both sides: how agents think about price, and how a valuer must support a value.

Can I use an appraisal for a pre-sale or pre-purchase decision?

You can, and many people do. But an independent view can be useful too. If you are buying, an agent represents the seller, not you. If you are selling, several agents may give you very different figures.

A pre-sale or pre-purchase valuation gives you an independent figure to weigh against what agents are saying. For residential property under $1M, a desktop valuation from $425 + GST can offer quick guidance. For higher-value homes, a kerbside or full inspection report is available from $500 + GST. See which valuation do you need for the differences.

Common mistakes to avoid

• Using an appraisal for a formal purpose. If the ATO, SRO, a court or an auditor rejects it, you may have to pay for a valuation anyway, and deal with delays.
• Relying on online estimates. Automated figures can be a starting point, but they do not inspect the property and are not a valuation.
• Ordering the wrong report. Tell the valuer why you need the valuation and who will read it. The purpose and date shape the report.

Talk to Tom

If you are not sure whether an appraisal is enough, call Tom on 0407 835 388 or send an enquiry. You will speak directly with the valuer and can ask questions before you book.

This guide is general information, not legal, tax or financial advice.