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time you want an objective assessment of what your real property is worth, a property
appraisal will give you a reliable answer. A property appraisal can give you evidence
to support: - a mortgage request
- your asking price for a property
- an
insurance application
- a request for a property tax reassessment
The
Bank Says I don't Need an Appraisal
Yes, the bank may say that. For example,
if you're arranging a low-down payment mortgage, the bank may tell you that it
can assess the value of the property with a computer program provided by CMHC,
the Canada Mortgage and Housing Corporation. The problem with this kind
of assessment is that no one at the bank actually looks at the property.
The CMHC program uses a comparative process that assumes certain criteria. In
many cases, the assessment is reliable. Unfortunately, mortgage scammers are learning
to work the system to have properties assessed at artificially high values. If
this happens to you, you may not learn the bitter truth about your property's
real value until you try to resell it. By contrast, when a qualified professional
appraiser appraises a property, a detailed physical inspection is made of the
land and structures. The appraiser then uses established standards of reference
to determine the property's value. When you have a property appraisal done, you
can be certain that you have established a true standard of value for the property.
What do Appraisers Do?
An appraiser will thoroughly inspect your property,
including the interior and exterior of any buildings. The appraiser will take
measurements to establish square footage. Once the inspection is complete, the
appraiser will canvass the neighborhood for information on similar properties.
The appraiser will also search the mls (multiple listing service) real estate
database to find properties with similar features, and note their value. From
all this information, a value range will be assigned to the property. Can
You Affect the Outcome of Your Appraisal?
Yes. Here are some tips for
helping an appraiser to assign full value to your home or other real property:
- make a list of the significant improvements you've made
to the property in the last 5 years, and the amounts you've spent.
- clean
and tidy up both the interior and exterior of the property before the appraiser
arrives. The condition of the structures, yard, and landscaping will all affect
the appraised value.
- check with an appraisal firm before renovating.
Some renovations increase the value of a property more than others. It pays to
check out how much of your investment you can expect to recoup.
- if
you know of comparable properties that have recently sold in the neighborhood,
make sure to tell the appraiser the addresses and selling prices of those properties.
This helps to establish a current value benchmark.
- leave plenty
of time to have your appraisal made, but don't be premature. In most cases, an
appraisal is "good" for about 90 days after it is made. After that time, the bank
or insurer may require an update. Updates are less expensive than a full appraisal,
but there is a fee involved.
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