At Nearhood Appraisal Services, we know that achieving a full understanding of real estate valuations and consulting services can be a complex matter. To help our clients in their efforts, we’re pleased to provide the following information on questions that we get asked the most. Can’t find the information you’re looking for? Please feel free to contact our office in Fort St. John. Our friendly and knowledgeable team is happy to help professionals throughout northeastern B.C.
What is an appraisal?
As defined by the Appraisal Institute of Canada: “an appraisal is an estimate of value. It can be provided orally but it is usually a written statement of market value, or value for loan purposes, or value as described by the appraiser of an adequately described property on a specific date and supported by the presentation and analysis of relevant data.”
What is market value?
As defined by the Canadian Uniform Standard of Professional Appraisal Practice (CUSPAP): “the most probable price 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.”
Do I need an appraisal?
An appraisal offers an unbiased, informed opinion of the market value of the property you own, or possibly interested in owning. Buying or selling real property can be the most important financial investment of your life; therefore you may want to look into getting an independent appraisal completed:
If you are using a lender to complete a purchase or sale, they will advise you whether they require an appraisal to be completed. Typically, if they do require a market value, they will order the appraisal themselves.
Appraisal assignments can be utilized for a variety of other reasons, other than buying or selling. Some of which include: assessment review; absorption studies; amalgamation purposes; estate planning; feasibility studies; market rent studies; litigation; insurance consulting etc. For a full list of the nature of appraisals we work on, take a look at our portfolio.
How do I hire the right appraiser?
When first starting to look at which appraiser may be right for you, ensure that you follow these steps:
An appraiser’s professional and ethical responsibility is to provide and independent and unbiased assessment of the value of the subject property. When hiring any professional it is important to do your own homework, and ultimately work with someone you feel comfortable with and can trust.
Who is the appraiser’s client?
We work on a confidential basis with all of our clients (known as a client-appraiser relationship). When a mortgage broker or lender requests an appraisal, they are the appraiser’s client, regardless of who pays the appraisal fee. Under the AIC’s Standards of Professional Appraisal Practice, any discussions on or disclosure of information contained in an appraisal report must be done with the written consent of the appraiser’s client.
When a lending institution requires an appraisal report on a property, more commonly with residential dwellings, they will engage an appraisal management company to act as an intermediary to facilitate the appraisal process on their behalf. While there can be a number of layers to the appraisal process, we are focused on making the process as seamless as possible to all our clients.
Why does the appraiser have to inspect my property?
An inspection is one of the first tasks performed by the appraiser. An appraiser’s inspection takes into account a number of elements that include:
What can I expect during a property inspection?
Our appraisers will always set a convenient time for an inspection with you. We recommend planning for 30 minutes to an hour for the inspection, depending on the size and characteristics of the property. During the inspection the appraiser will:
How soon after the inspection can I expect an estimate of value?
Most of the valuation process occurs after the inspection. The inspection allows the appraiser to gather sufficient information to be able to properly describe the property.
Estimating the market value requires the appraiser to complete a thorough analysis of market conditions and activity. It is often a complex process, and there are many factors that determine the timeline you can expect.
Our appraisers always provide an initial quote that must be agreed upon prior to the inspection, which will outline the timeline they anticipate for the report. The time frame can depend on many factors, such as the nature of the report, the location of the property, the research involved etc.
Nearhood Appraisal Services continues to deliver exceptional customer service, and we always keep our clients updated when we are nearing to the completion of the report. As an industry standard, the estimate of value will not be released prior to report completion and invoicing.
Why does my appraised value differ from my B.C. Assessment?
Both the assessed value for tax purposes and the appraised value are based on market value in B.C. However, the BCA value is the market value estimated as of July 1st of the previous year, whereas a current market appraisal is based on the current date. An assessment is often appraised on a bulk basis, lumping many similar homes in the same neighbourhood together. The assessor may also not be aware of any updates or renovations that a home may have, as they do not perform an interior inspection or look into current listings, sales etc. An appraisal would take all of those into account and more.
We hold tax review workshops throughout the year. If you have questions or concerns about your properties assessment, these workshops are designed for you. Click here for more details on our up and coming workshops.
What steps can I take to improve the value of my home?
No matter what the reason is for wanting to renovate or make small changes to your home to increase value, planning a renovation is key to protecting your investment. Here are some frequently asked questions that may help you when making the decision on which renovations should be priority in your home:
Q: What are some of the best ways to improve the value of your home?
A: Upgraded or renovated kitchens and bathrooms, as well as flooring upgrades, windows and doors can provide great appeal; however, it is important not to “under-improve” or “over-improve” a home.
Q: What are some of the small renovations most recommended to homeowners wanting to sell their home?
A: Painting goes a long way to adding freshness and redefining the style of a home. Trim, interior doors (including resurfaced kitchen cabinets), door handles, bathroom fixtures, lighting fixtures don’t necessarily require large investments but can easily modernize a home on a budget.
Q: How much money should people expect to receive on their renovation investment when they sell their home?
A: The return on investment depends on the contributory value of the renovation and tends to vary from market to market. The contribution to value is determined by the actions of buyers and sellers which is something that must be analyzed and estimated in the local market. For example, investing $30,000 renovating a kitchen may be an over-improvement for a home in a particular market, which means that the return on the renovation investment would likely be partially recognized by homebuyers. As experts in real estate valuation, appraisers have the knowledge and the expertise to advise homeowners, buyers and sellers on the contributory value of proposed renovations
Q: What are homebuyers drawn to when considering a purchase?
A: First and foremost the location of the home in relation to their workplace, schools, relatives, friends, public transit; convenience and accessibility to shopping centres, restaurants, recreation centres; suitability to the homebuyers’ lifestyle (e.g. rural, urban, waterfront); and the immediate and surrounding neighbourhoods. Depending on how long a homebuyer is planning on owning the property, the anticipated resale value of the home can also be a great consideration. Other key features include the physical characteristics of the home such as design, style, size, quality of the finishes and workmanship, potential for expansion and landscaping.