This week we continue with our series of 12 conveyancing key terms explained in a no nonsense, plain English way. Here are another 3 key terms you need to understand in conveyancing work:
‘Equity’ actually means fair, impartial treatment – it relates to integrity and decency, so it is a relative term. However, in various industries, it isn’t relative, it is specific. The term ‘equity’ is used in trading, investment and finance with many variants, but pertaining to monetary or assets value. In conveyancing, ‘equity’ is the equation result between the property’s current market value and what you owe to your mortgage lender. Deduct the outstanding mortgage from the market value of the property and you have your equity.
An appraisal is what someone thinks your property is worth. It is an informal process usually carried out by an estate agent. The agent checks your property and makes a decision based on what they see in your property and what they know in relation to the market. It isn’t a formal process so it will likely differ from the actual formal process, which is ‘Property Valuation’. Property appraisals are generally free and we advise you to get several estate agents to give you this service before you move on to the property evaluation process which incurs a fee.
A property valuation is basically the process of assessing your property value. This can be carried out by an estate agent but it is also carried out by a licensed valuer and there’s usually a fee to be paid. Your property will be inspected by the valuer and they will then assess the value of the property in line with the current market. It’s important to be aware that an estate agent’s valuation might differ from the licensed valuer. The valuer will look at the condition of the property, the size and the location.
Next week is the final part of this series of 12 key terms about conveyancing that you need to know. If you are thinking about buying or selling a property or land, please give us a call for an informal discussion. We will help you demystify any jargon in the conveyancing process. SG
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