An appraisal of property, whether it be in person or online, is a necessary process to establish the value of a property either when a home owner is looking to sell or potentially refinance that property.

In this blog post we’ll shine a light on the process of what goes into an appraisal, the methods most commonly used, timing, emotions, cost and the difference between an appraisal vs a valuation.

We’ll also spotlight the ‘ugly’ side of appraisals; something not normally spoken about by real estate agents but a real factor in the industry. You’ll want to read every word of the article to discover the ‘dirty little secret’ so you are not hood winked when making possibly the most important financial decision of your life. Let’s start at the beginning

Appraisal meaning

An appraisal is an estimate of a property’s worth. The word ‘estimate’ is key here. Nobody can accurately predict the exact price for your home. The price will be determined by the market; what somebody is prepared to pay for it. Not a dollar less or more.

Appraisals are carried out by licensed appraisers (real estate agents) who use various methods to calculate a home’s value.

 Appraisal methods

Online appraisals

An appraiser using this method takes into consideration the location of the property, size of land, building construction (via photos) age and competition within the market (sometimes). They are quick and easy and can be sent to a home seller within hours.

Such services are frequently advertised on social media and Google using enticing words like ‘what’s my home worth’. It’s ok to click on these banner ads, but be sure your you are ready to go to market. These advertisements are often lead generation campaigns run by third party aggregators who will on sell your data to real estate agents. If you don’t want to be inundated by emails from agents, don’t go wild with your clicking.

Free websites to judge your home’s value

  • Domain
  • Real (REA)
  • Property Value
  • Home Guru
  • Real Estate View
  • On The House
  • Homely

Another downside of this appraisal method is that any improvements to the property or its current condition are not taken into consideration. Put simply they can’t be seen. This could cost a seller thousands.

Research data offered by CoreLogic or Pricefinder are the go-to companies most agents use to carry out online appraisals. Agents pay fees to these companies to research data which they absorb or pass onto sellers.

Physical appraisals

These occur when a licenced real estate agent visits your home to assess the value. The condition of the property is taken into account, has the property undergone any renovations, what repairs might be needed and have any extensions been added to improve the property.

Typically, this style of appraisal is usually more accurate and when coupled with current research data, a fair price is reached.

The variable here is the appraiser – the real estate agent. They are human and they can get it wrong but overall, the physical appraisal will give you a more accurate price.

‘We’ve been long time advocates of physical valuations. We will occasionally carry out online assessments but these are sent to the recipient with a long list of disclaimers.

Put simply without seeing the property, we can’t give you the best indication of price. This style of appraisal of property delivers the best result for a seller.

At Hutton & Hutton, we like to think our appraisals are the best and most accurate in the city. Our agents are armed with the latest research apps and attend regular inhouse training addressed by external industry experts, on market conditions and doing appraisals” Peter Hutton, Group CEO outlined.

Free vs paid – appraisals vs valuations

99.9% of appraisals offered by real estate agents are free. They use in home inspections supported by research data from CoreLogic or Pricefinder to come up with an estimate.

Hutton & Hutton also have an appraisal app which is regarded as one of the best in the market.

They are not licenced to value a property. That’s done by a valuer, a person who is degree qualified in property valuations, and one who usually charges for the service.

Banks and other lending institutions user valuers when assessing your loan application. Typically, these valuations are more conservative in your potential sale price as the bank wishes to protect itself from risk when lending you money.

Things to consider with appraisals

  • Timing
    In a moving market, up or down, appraisals can become obsolete quickly. This may occur within a matter of weeks, so you need to listen to your agent as to where your property market is currently sitting.The media can also be a source of determining where the market is with nightly news bulletins dominating with commentary from industry experts. Use such announcements as a guide and don’t get caught up in the hype.
  • Appraisal theory of emotion
    Appraisals use data; not emotions when determining price. Even physical appraisals do not take into account emotions. Go with an appraisal that makes realistic sense.
  • The agent
    Be sure to check out the agent who is doing the appraisal. Which agency are they with, does that business have a presence or market share within your suburb, how long has the agent been selling and what is their sales success.

Real estate appraisals are the first step for an agent to secure a listing of a property. This is standard procedure but sometimes there are dangers.

The ugly side of appraisals

As mentioned above, for an agent to get a listing, their appraisal must be accepted by the seller. It’s critical for an agent to have listings and more importantly listings that sell for them to earn an income. This is where the ‘ugly’ side of the real estate business rears its ugly head.

It’s called buying the listing; a practice where the price is inflated to make the seller happy thus awarding the listing to the highest appraised price agent.

The red flag, to a seller, should be ‘the well above market price’ by one agent compared to other agencies brought in the access the property.

Agents who use this tactic work on the premise that they’ve secured the listing and that they’ll ‘educate’ the seller down to a realistic price, usually the figure given by the honest agents. The property is sold at the market value, the agent is happy with their commission but the seller is disgruntled. They probably will never use the agent again nor recommend them.

But this is not all about ‘bad boy agents’. Sellers who are ill informed about the current market or are in a ‘must sell’ commitment, will look at appraised property prices through rose-coloured glasses and go for the higher one. Above all sellers should want an appraisal of property to be accurate.

“We provide lots of data to our customers. Our agents are well equipped with accurate data to come up with the right prices. Sellers can receive our regular newsletters or visit our website for the latest market news.

We won’t chase a listing through overpriced appraisals. We will give you the best, most accurate appraisal timed ‘to the minute’ and when you list your home with us, we’ll use our superior, industry recognised marketing, supported by well-trained agents, to get you the best price. We will not leave any money on the table in our negotiations for you” Peter Hutton emphatically commented.




An appraisal of property is necessary to determine a price. A home seller needs to know what his/her home is worth if they want to sell it and an agent needs to provide an accurate assessment in order to secure a listing.

Appraisals can be done online using research data services or engaging a real estate agent to do a physical inspection. The service provided by a real estate salesperson is free whereas a degree qualified valuer can charge for a more in depth valuation.

Most appraisals are fairly accurate but some unscrupulous agents will engage in over inflating the appraised price to buy the listing. Fortunately, this is easy to detect.

If you want an accurate, data driven appraisal, performed by ethical, well trained real estate sales agents who adopt industry leading marketing to get the best possible price for you at sale time, contact us here. We’d love to appraise your property.