Here we hope to answer any question you may have about appraisals and real estate appraisal services. The following is a collection of questions that we been asked. To go directly to question discussion, click on the text link below:
What is an appraisal?What does an appraiser do?Why would a home appraisal be required?What is the difference between an appraisal and home inspection?What is different about a Comparative Market Analysis and an Appraisal?What does an appraisal report contain?What assurance is there that the report provides a valid conclusion of value?How is an appraiser certified?Who does the appraiser work for?Where does the information used in appraisal come from?Do I need a professional appraisal?What is Market Value?Who owns the appraisal?An appraisal is an objective method used by professional appraisers to determine the estimated market value of a property. The appraisal uses two or three approaches depending on the property in order to reach this assessment of value. The Cost Approach examines what the cost to replace the improvements and land value of the property would be. The Sales Comparison approach carefully looks at what other similar and comparable properties in the area are selling for and uses this information in assessing the property’s value. The third, Income Approach, is used when a property is used to generate income, such as a rental home, and uses that information as part of the value assessment.
[back to top]Appraisers deliver an objective and professional assessment of the estimated market value of a property that is used in real estate transactions. The assessment is a detailed analysis of the value of a property communicated in a report submitted by the appraiser.
[back to top]A home appraisal may be needed in a variety of situations beyond just mortgage and real estate transactions, including:
Appraisers are not home inspectors and do not make a detailed examination of the physical condition of a home. Home inspectors provide a third party objective inspection of the condition of a home. They examine the roof, the foundation, the flooring, the systems of the house like heating and air conditioning, the plumbing and electrical etc… and provide a report on their findings. They do not provide an assessment on the market value of the home or property.
[back to top]A Comparative Market Analysis takes a narrow view of what a property’s value is based on market trends. Appraisals use objective methods based on tangible and real criteria to assess the value of a home and property. An appraisal is an objective opinion of the estimated true value of a home that gives clear reasons for the assessment’s conclusions. The difference lies as well in who is creating the report. An appraiser has no vested interests in the sale of a home or property while a Comparative Market Analysis is provided by real estate agents whose incomes are based on the value given a home.
[back to top]Each appraisal report contains a reasonable and credible estimate of value and must also contain:
Appraisers are responsible to ensure that the information used in their analysis was appropriate and that they completed the work in an accurate and professional manner. Appraisers are careful to complete reports that are both credible and reasonable based on verifiable information avoiding significant mistakes by doing careful and honest work.
Most provinces require that appraisers be certified. Certification means that the appraiser has been trained and taught how to assess property and provide unbiased opinions of the value of that property. This training involves significant education and actual experience performing appraisals properly to the requirements needed for certification. Appraisers are also expected to abide by their industries code of ethics, complying with the standards expected of them.
[back to top]An appraiser becomes certified by accomplishing the schooling needed, by passing the required tests, and performing many hours of practical experience. Even after an appraiser becomes certified they are required to take part in ongoing continuing education courses to keep their certification.
When an appraisal is requested of Urban Valley Appraisals, the appraisal is performed by a fully accredited appraiser. For residential properties this means the appraiser has the CRA designation under the Appraisal Institute of Canada. Our appraisers have viewed and reported on over 7,000 residential properties to date.
[back to top]Appraisers are usually hired by lenders to determine the estimated value of a property involved in a real estate transaction that requires a mortgage and loan. Appraisers can also be hired in other matters as well, such as tax assessment reviews or in legal matters.
[back to top]Appraisers gather information based on specific and general sources. Specific information is collected from the home being appraised. When the appraiser visits the home they make note of specific information regarding location, amenities, the square footage, the condition of the home etc…
General information is taken from the Multiple Listing Services where the appraiser is able to find information on recent sales that can be used as comparable subjects using the Comparison Approach. Appraisers also verify actual sales prices by viewing tax records and public records of sales. Appraisers are able to use their extensive experience in assessing property to provide a credible assessment of value.
[back to top]Whenever property is at the basis of financial decisions that you are making appraisals are helpful. When selling your home an appraisal will give you an excellent idea of what kind of price you can expect to list at that is reasonable for your area or even give you an idea of whether it is worth selling your home in the current market. If you are a buyer an appraisal will tell you whether the price being asked is reasonable for what you are looking at buying. Any financial situation involving property will benefit from an appraisal. Knowing the value of the property will ensure that all parties involved have a good idea of what kind of actual value they are involved with, which can avoid needless conflict.
[back to top]Market value refers to the value that the current market place ascribes to a home or property. It is what the property most likely will sell for given the current market.
[back to top]The appraisal itself is legally owned by the individual/client who placed the appraisal order. Therefore, in most cases the appraisal is owned by the lender who is the party that orders the appraisal in a real estate transaction even though the buyer pays for the cost of the assessment. Normally the consumer can easily obtain a copy of the assessment by asking for one, at which time the lender requests in writing that the appraiser provide a copy to the consumer. The consumer often receives a copy of the report with their closing documents as well.
If a homeowner hires an appraiser directly then the appraisal belongs to them to use for whatever purpose they have obtained the appraisal, such as tax property review or estate planning.
[back to top]Urban Valley Appraisals (UVA) has been set up as a virtual office to create the lowest carbon footprint possible for running business. Unless requested by the client, all communication is digital including the delivery of appraisal reports.
Although UVA has a virtual office, at times it is necessary (and beneficial) to meet clients face to face to discuss difficult assignments and assess specific needs. We are available to meet at the client’s place of business or at a suitable alternate location.
