What is an appraisal?
- Definition of Appraisal
An appraisal is an assessment of a property done by a professional home appraiser to determine the current market value of the land and building structures and based on a variety of factors. Those factors, among others, include location, square footage, age, condition and recent sales in the neighbourhood.
Why is this term important?
Appraisals are unbiased and professionally done on a case by case basis. Perhaps you are in a real estate boom and are looking for accurate market value, or maybe you want to renovate your home before you sell. Before buying or selling a home, appraisals are a valuable part of the process to determine a fair price that will save the buyer and seller a lot of stress, and will also protect the lenders best interest. Home appraisers in Canada are certified through the Appraisal Institute of Canada.
All home appraisers are required to provide a standard report that breaks down the home valuation and appraisal. The appraisal will include 25 points of inspection, which covers anything that is of importance to a home buyer — including unique features such as a pool or professional landscaping. Typically, the price range for an appraisal is anywhere from $300 to $500. If you are buying a home, an assessment will be one of the steps needed for closing to complete.
Examples of term
Say you are in the market to buy a new home. Once you have found a property, you look to move forward in the process and reach the closing stages. The property is for sale at $450,000. Within the closing requirements, your lender requests that a home appraisal is done. You hire a professionally certified appraiser to come in and do an assessment of the property. After their evaluation is complete, they send their findings off to the lender. You are also interested in the value of the property — so opt to receive the results yourself. The current market value of the home is $428,000, which means that you now have some negotiability power to go back to the seller and discuss price.