What Is Estimated Market Value?

Property appraisal, valuation and ‘estimated market value,’ or market value estimate, are often used interchangeably in Australia. These terms can be confusing, especially for first home buyers with little or no knowledge or experience of property-related matters.

» MORE: Mortgage glossary and home loan terminology

Valuations vs appraisals

A bank valuation is a legally binding document obtained by a bank or lender from an independent certified property valuer that details all relevant information about a property’s physical attributes and location. The valuer then adds a range of data points for the market and the broader economy to arrive at a figure that a seller could realistically expect to get in the current market and that a buyer would be expected to pay.

An appraisal, on the other hand, is conducted by a real estate agent and uses similar information but less detail to arrive at an educated guess as to a property’s value for sale purposes.

Valuations vs estimates

A bank valuation informs you of how much you can borrow or realistically sell your property after a thorough investigation of all factors.

A market estimate, on the other hand, is similar to a desktop valuation in that there is no physical inspection of the property. Instead, it relies on all publicly available data to work out a property’s value. This information can include everything from the size and number of rooms to the property’s age, sale history, location, and data for the sale of similar properties over the past 90 days.

Importantly, there is no need to engage anyone to do a market estimate on a property; you don’t need to own the property or even be interested in buying it.

How to find the estimated market value of a property

There are plenty of free sites out there where you simply key in the address and get a market estimate such as:

Most of these sites use similar tools and data to those used by banks for desktop valuations and also contain comprehensive property sales histories.

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How accurate is an estimated market value?

Property value estimates also usually come with a confidence score of how accurate the result of the estimate is likely to be. If several very similar properties have sold recently in the area, you can at least have some degree of confidence that the estimate is somewhere near the mark, you may be fairly confident. But, if the property hasn’t changed hands for a long time and there is a shortage of reliable sales information for the suburb, the confidence score will be lower.

The above sites will often give conflicting estimates, and a high or low confidence score will still only provide a vague idea of what the property is really worth, given the unique qualities of every property and the lack of information regarding the state of the property itself.

It is, therefore, highly recommended that, as a seller, you get an appraisal from an agent at the very least. If you’re buying, you’ll probably require a full bank valuation anyway. At any rate, a market estimate is usually a great starting point to see what your property or the property you are interested in is worth compared with others in the area.