Why nobody agrees what your house is worth

Why the agent's number is usually the highest

This is not an accusation of dishonesty. An agent appraising your home is competing for your business against two or three others who are appraising it the same week. Everyone in that room knows an optimistic number is more likely to win the listing, and everyone knows the price can be revised down once the campaign is under way.

There is a compliance dimension in Victoria too. An agent must base an advertised price range on recent comparable sales and a reasonable estimate of the likely selling price, and Consumer Affairs Victoria can penalise underquoting. An independent valuation gives you and your agent defensible evidence for the guide from day one.

Why the bank's number is usually the lowest

A lender's valuation is prepared for mortgage security purposes. The question behind it isn't what a motivated buyer would pay on a good day — it's what the bank could recover if the loan failed and the property had to be sold, possibly quickly and in a worse market. That framing produces a conservative figure by design.

The depth of the report also varies with the risk. Lenders match the valuation type to the loan-to-value ratio: desktop assessments at low LVRs, a kerbside inspection through the middle band, and a full internal inspection once the ratio passes 80 per cent. At the low end, the number your bank is working from may have been produced without anyone attending the property.

Most lenders will only accept valuations from valuers on their own panel, so an independent report generally won't replace theirs. What it does is tell you whether the bank's figure is out of step before you commit to an application — and give you something concrete to point at if you want it reviewed.

What the online estimate can't see

Automated estimates work from sales data and recorded property attributes. They are genuinely useful as a starting point, and they are wrong in a specific and predictable way: they cannot see the property.

• That the kitchen and bathrooms were replaced last year — or never
• That the floorplan is compromised, or the rear addition was done badly
• That a new development now overshadows the north-facing rear
• That a heritage overlay restricts what a buyer could do with the site
• Whether that sale three doors down was genuinely comparable

The error is largest exactly where it matters most: unusual properties, heritage homes, rural and lifestyle blocks, development sites, and anything recently renovated. If your property is unremarkable and unimproved, the estimate may be close. If it isn't, it can be out by a very long way in either direction.

The test that settles it

Ask who has to rely on the figure. If the answer is only you — an early read before deciding whether to sell, or tracking equity across a portfolio — an online estimate or a desktop valuation may be all you need.

If the answer includes a bank, a court, the ATO, the State Revenue Office or the other side of a dispute, you need a valuation: written by a qualified valuer, supported by comparable sales evidence set out in the report, and signed by someone who is professionally accountable for the conclusion. The Victorian State Revenue Office, for instance, accepts a valuation from a Certified Practising Valuer who is a member of the Australian Property Institute. It does not accept a screenshot.