Frequently Asked Questions

Why should I get an appraisal completed?

Having your house or commercial building appraised is important for numerous reasons. Before you decide to sell your property, you should know its value, or if it is worth doing some “touch-up” work to maximize your property’s potential. If you are buying, you may want someone who is at “arms-length” to help determine whether you are paying a fair market value for the property. If you are planning on renovating, and wish to cover the costs by re-financing, your bank will require an appraisal to value your property “as is” and “as improved.” This will help to set your construction progress draws, as well as help you determine which improvements will give you the most value for your efforts.

What is “Market Value”?

“The most probable price (in terms of money) which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: the buyer and seller are typically motivated; both parties are well informed or well advised, and acting in what they consider their best interests; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash in Canadian dollars or in terms of financial arrangements comparable thereto; and the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.”

How do I prepare my property for the appraisal?

We begin with an inspection of the property. What this entails is the appraiser, after setting up an appointment, personally going through the home – recording the layout of the rooms, taking photos and documenting the general status of its amenities. Inside, pick up any clutter and make sure we can find our way to things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of exterior walls.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:

  • Records on the latest purchase of the property in the last three years.
  • Title policy that describes encroachments or easements.
  • Any inspection reports, or other recent reports for termites, wall systems, your septic system and your well.
  • A list of any major home improvements and enhancements, the date of their installation and their cost (ex. the addition of insulation or roof repairs) and permit confirmation (if available).
  • Most recent real estate tax bill and or legal description of the property.

How does the appraiser determine the value of my property?

We generally use two of the three valuation approaches to determine the value of a property:

  • Direct Comparison Approach: a value is derived by analyzing comparable properties that have sold within a given time frame and adjustments are made for the differences.
  • Cost Approach: a value is derived by using the cost to replace the land, plus the value to replace the improvements, minus any depreciation for the age of the dwelling.
  • Income Approach: a value is based on the projected income from a rental property.

What is the difference between an ‘Appraisal’ and a ‘Home Inspection’?

The Home Inspector is to provide an evaluation/report which will include an evaluation of the condition of the home’s heating system, central air system, interior plumbing, electrical systems, roof, attic, visible insulation, walls, ceilings, floors, windows, doors, foundation, structure, etc. An Appraiser is to establish an estimated Market Value of the subject property based on current market conditions.