When buying or selling a home, your Realtor seems the logical place to go for answers to all your critical questions. However, a real estate agent is only one option to evaluate whether you have accurately priced your home. Finding a suitable home appraiser is vital in this process.
A home appraiser is vital to ensure you have an unbiased opinion when determining the value of your home. Jason Upton, a supervising appraiser at Aedis Realty and industry expert, explains that appraisers are paid upfront. They have no stake in the outcome of the home evaluation. This, along with critical educational requirements, means that appraisal reports are the gold-market standard for finding a property’s current market value.
Why Are Home Appraisals Important?
“An appraiser will value a property based on their methodologies and principles that they’ve learned through their trade organization,” said Upton. The value is very accurate. In simplified form, a home appraiser provides an opinion on the value of a property. It’s based on their inspection, research on outside factors that could affect the home and overall market analysis. Behind the scenes is the analysis of hundreds of factors that go into valuing real estate and thousands of data points.
Yet, how do you know if you need an appraisal in the first place? It depends. Lenders pay for an assessment, particularly in hot markets, to ensure the loan amount is not higher than the home’s value. But lenders aren’t the only entities that benefit from an accurate, fair market evaluation of a property.
For example, sellers in hot markets will often opt for an independent appraisal report to confirm that they are selling or refinancing for top dollar. Plus, homeowners who want to renovate their homes usually pay for an appraisal report. This ascertains whether or not their plans will maintain value, particularly over time.
What Should You Look For When Hiring a Home Appraiser?
No matter what the reason, finding an appraiser is the first step. Here are four tips on how to find a home appraiser in Canada.
1. Look for a Professional Home Appraisal License or Certification
Before moving forward with a recommendation from a friend or family member who once used “Bob the home appraiser,” check the Appraisal Institute of Canada (AIC). They provide local appraisers in your city and province.
What’s great is that professional appraisers are well-educated and well-licensed in Canada. Not only can you find an appraiser through the AIC, but you can narrow down the list based on their expertise. For example, some appraisers specialize in multi-family surveys — appraisal reports for large developers — while others provide services for individual homeowners.
Another option is to ask your real estate team for a referral. For example, your Realtor, mortgage broker or home stager will probably know an appraiser and would happily pass on their contact details. You can then check these referrals out on the AIC site.
2. Get to Know the Home Appraisers’ Experience
Trust is essential for the relationship between a client and an appraiser. To build that trust, interview the appraiser about their experiences.
Ask them about personal designations or memberships. These would demonstrate their commitment to further education in the industry or ethical standards.
Suppose you’re happy with their initial answers, then ask them why you should hire them. Listen for the appraiser’s perspective on valuations, personal experiences in the community, and whether or not they have a website you can check out (most don’t, but you never know).
“The number one thing to look for is to ensure that the appraiser is certified by the Appraisal Institute of Canada (AIC),” said Upton. “This is the leading and best-known organization, with the most stringent training and complicated course structure and requires the most experience.”
If you’re happy with the answers the appraiser provides and know they have the proper certifications, now is an excellent time to ask for references. References can be written testimonials, personal interviews with former clients or online reviews.
3. Know What Questions to Ask
It’s also important to ask the right questions to confirm what the home appraiser will provide you if they are hired for the job. For example, what will the final report look like? How should you, as a buyer or seller, use this report?
Remember that all home appraisers must provide a standard report that breaks down the home valuation and appraisal. The information will include methods and theories used by the appraiser to determine the fair market value of your property based on a specific date.
“We need a specific day to look at what the market was like at that time,” said Upton. “Depending on market conditions, it may or may not be different than two weeks prior, given our ever-changing market.”
Most appraiser reports in Canada follow a 25-point inspection list, where the appraiser considers anything significant to the buyer. Those fundamental things include location, the age of the home, the size of the home, upgrades to the house, the layout of the home, and special features like pools or landscaping and view.
4. Consider Home Appraisal Cost Comparison
There are a variety of costs associated with buying and selling properties. Set your budget for a home appraiser based on the average cost in your city. The price range for this service should hover around $500 in more significant markets. Remember, the price reflects the quality of service, and a cheap bill might come with corners cut and missed details. The amount of land and the intricacy of the property determines the value. Ask around to find a price that fits the project.
5. Look for Market Valuation Experience Similar to Your Needs
If you are ready to buy or sell a condo, hiring a home appraiser with experience with a similar property type is best. It would help to verify that the appraiser has experience in your local real estate market or community. This will help when they research economic factors and neighbourhood details. If you aim to establish future property tax costs (say, due to an extensive renovation), find an appraiser who can best assess that need.
Final Steps
Once you have found the home appraiser that is best suited to help you buy or sell the property, there are essential steps to take:
- Finalize the costs upfront and determine what the appraiser will provide you upon job completion.
- Sign a contract or agreement that states appraisal dates, payment deadlines, and the details that will be included in the final report.
- Once finished, take the final report to your lender to confirm the sale or purchase of your property (if applicable).
Property appraisers provide more than an opinion — they offer an educated assessment based on more than 100 different market and economic factors. Having an unbiased view to help determine the value of a property is essential when dealing with such a significant investment. Use these tips to help you find a trusted and professional home appraiser.
