Do You Need a Real Estate Appraisal in Toronto?
Real estate appraisals can take varying forms. An appraisal is an inspection that provides an estimate for the value of a property. A mortgage lender requires an appraisal so that he or she can confirm the value of the collateral for financing.
Why Property Owners Ask for Appraisals
For the purposes of lending, an appraisal is normally performed as a verification of a property’s value, which is part of a lender’s assessment of risk. In some instances, however, homeowners today are requesting the service themselves. They are asking that real estate appraisers in Toronto perform appraisals for reasons outside of lending.
These reasons may include the following:
- Financial asset planning
- A private home sale
- Retirement planning
- Divorce settlement
Answering Key Questions
In many instances, a real estate appraisal in Toronto can assist a property owner, when he or she is the client, to establish a reasonable price for the sale of his or her real estate. Having an appraisal ordered can also help owners of properties answer the following questions:
- Are the property taxes for the real estate too high?
- What upgrades may add more value to the property?
- Should the property be rented rather than sold?
When it is performed for a home, a detailed appraisal provides the following information:
- The economic life of the property
- The property’s condition
- Further suggested inspections, such as an engineer’s report
- Additional detail on a property’s utility
If you live in a location where comparable data cannot be accessed easily, the cost of the appraisal is higher. Usually, lenders that order an appraisal for financing a home do not share the information with their clients.
Therefore, if you are a real estate purchaser who wishes to have your own appraisal done to confirm a home’s value, the information can serve you well if you wish to negotiate. For instance, if a home’s price is higher than the appraised value, it provides a real estate purchaser with bargaining power.
It also helps to have an appraisal performed on a house that you have under construction or you are buying for the first time. Doing so prevents a first-timer from overpaying.
Recognised Appraisal Methods
Three recognised appraisal methods are used in Canada. The direct comparison method compares the subject property with similar real estate property that is for sale or has been sold based on area comparables.
The cost approach of appraisal projects the replacement cost of a property before applying depreciation to certain elements such as the physical condition, function, and external obsolescence of a structure.
An income approach is used for commercial valuations. It estimates the potential income of a property and applies the proper mathematical equation.
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List the Improvements that add great value to my home
Here is a detailed list of improvements that makes a great impact on the market value of your home.
- Bathroom remodelling
- Kitchen remodelling
- Attic and basement remodelling
- Deck, patio or porch addition
- Family room addition
- Living room updates and more.
Why should I get a professional real estate appraisal?
Working with an experienced and licensed appraiser is important when you want to find the exact market value of your home listed for sale. The appraisal process is actually complex and hiring the pros significantly reduces the amount of time and effort that both lenders and borrowers must invest in. A professional real estate appraiser pays close attention to every aspects of your home including new appliances, new upgrades, and more that can make a great impact on your property value. They provide you with the most accurate selling price of the property and help you to secure the right mortgage.
Explain the term ‘market value’
Market value is the expected or the most probable price that a property will sell for in a competitive real estate market. Getting a professional home appraisal in Toronto is a simple way to get the exact market value of your property that you are thinking about selling or buying. The market value is beneficial when,
- Your home is listed for sale
- Property is involved in a settlement
- Your home is tied up in an estate
A real estate appraisal to determine the market value involves a physical inspection of the property that is being appraised, analysis of general market data and application of a comprehensive valuation approach.
What information or details does the appraisal report contain?
The real estate appraisers in Toronto provide you with a detailed appraisal report that features the credible estimate of your property value. This includes the following details,
- The purpose of the appraisal
- The type of value reported and the definition of the value reported
- Identify the client or intended users
- An analysis of reasonable exposure time linked to a market value opinion
- The date of the appraisal report
- The effective date of the appraisal and opinions contained within
- Division of interest
- Fractional interest
- Physical segment and
- Partial holding
- The scope of work used
What is a real estate appraisal?
Real estate appraisal in Toronto is an integral part of the purchase or sale of your property as the appraisal value can make or break a sale. Performing a real estate appraisal helps you to determine the true market value of your property. The detailed appraisal report compiled by a licensed appraiser helps you to decide whether to sell or buy a property. At Aedis Appraisals, all our depreciation reports are produced in accordance with the Appraisal Institute of Canada’s strict standards and are completed with the highest and most recognized commercial designation in the appraisal industry.