Is an appraisal the same as a valuation?

The legal line between them

A valuation of land for members of the public can only be produced by a registered and certified public valuer. That registration sits under the Valuers Act 1948, and doing the work for the public is restricted to people who hold it.

An appraisal comes from a licensed salesperson, under rule 10.2 of the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012. Different qualification, different rules, different document. What has to go into one, and how to read it, is set out in what a market appraisal is.

What each one is for

An appraisal is a selling document. Its job is to help you decide whether to sell, how to market, and where to set a price or a reserve.

A valuation is an independent assessment prepared because a particular party needs one for a particular purpose. It is a report meant to be relied on, and it carries the valuer's name and registration.

Who needs which, and when

• Deciding to sell, and where to price. The appraisal. Your salesperson has to give you one in writing anyway before you list.
• Somebody else has asked for a valuation. A lender, a court, a trust, an accountant, an estate or relationship property matter. Ask them whether they need a registered valuer's report specifically, because an appraisal will not stand in its place.
• Both. Nothing stops you having an appraisal for the campaign and a valuation for whoever has asked for one. They answer different questions and they can arrive at different numbers.

What it is called when it is not a valuation

The Real Estate Authority makes the point directly: very few licensees are also registered valuers, and licensees must be careful not to use the word valuation incorrectly. A salesperson's estimate is an appraisal, or a market appraisal. If someone selling real estate offers you a valuation, ask whether they are registered.

If you are handed a price estimate and you are not sure which document you are holding, two questions settle it. Who prepared it and what do they hold. What sales is it built on. Rule 10.3 requires a licensee to tell you in writing where there is no directly comparable or semi comparable sales data, rather than present a figure as though there is.