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Appraisers are impartial third-party experts who determine the value of real property. They assemble facts, statistics, and other information on a specific property. Appraisers then analyze the data, develop opinions of value, and provide assistance to those who own, manage, sell, invest in, or lend money on real estate.
This depends on the type of assignment. Progress inspections may only take 15 minutes but commercial appraisals could take 2-3 hours. On average, a full interior/exterior residential site visit takes up to one hour. The appraiser will measure all buildings and take numerous pictures and take notes. At the time of the booking, our administrative staff will provide you with a timeframe.
(When required by a lender) The appraisal is in fact, legally owned by the lender – unless the lender “releases its interest” in the document. However, consumers may be given a copy of the appraisal report. This will depend upon the lender releasing their interest, the request must be written and release is at the discretion of the appraiser.
An appraisal is an unbiased estimate of what a buyer might expect to pay – or a seller receive – for a parcel of real estate, where both buyer and seller are informed parties. To be an informed party, most people turn to a licensed, certified, professional appraiser to provide them with the most accurate estimate of the true value of their property.
In the cost approach, the property’s value is equal to the cost of land, plus total costs of construction, less depreciation. It yields the most accurate market value when a property is new or newer. This method is considered at the higher end of market value given the cost of construction. This method is least relied upon for older properties or properties with varying ages of construction. Accounting for all forms of depreciation can be difficult and somewhat subjective.
Appraisals are required in many instances which can include: estate planning/settlements, matrimonial deliberations, renovation projects, thinking of selling, buying, refinancing and more. When it comes to first mortgage financing, an appraisal is almost always required. Your lender will provide you with guidance on its requirements.
No. Appraisers make a detailed analysis of all factors that affect value of a property including, but not limited to: its location, lot and building size, condition, additional improvements, garage, other outbuildings, proximity to amenities and many others. The appraiser will apply quantitative and/or qualitative measures to adjust the value of the comparable sales to arrive at a final adjusted market value.
Before an Appraiser arrives, there are a few things you should do. Make sure that all buildings and interior rooms are accessible and have a clear path of entry. Open all lights and unlock any doors. Ensure the appraiser can observe the hydro panel, hot water tank and heating systems. Our administrative staff will send you an information package explaining our process and provide you with guidance.
An Appraisal does not serve the same purpose as an inspection. A home inspector determines the condition of a property and its major components and reports these findings. The Appraiser forms an opinion of value using the Appraisal process (cost approach, direct sales approach, income approach) resulting in a final report. The appraisal is used to meet a specific purpose such as certifying value for lending conditions.
That will depend on the type of property (residential vs commercial), the purpose of the appraisal and the location of the property. The quote takes into consideration the time it will take to complete the file. This could include meetings, phone calls, progress inspections, additional services such as market rent analysis, “as is” and “as Improved” values , retrospective values and much more. Each file is quoted individually.
An appraiser’s duty is to inspect the subject being appraised to ascertain the true status of that property. The appraiser must examine features, such as the number of bedrooms, bathrooms, the location, and so on, to ensure that they really exist and are in the condition a reasonable buyer would expect them to be. The site visit often includes a sketch of the property, ensuring the proper square footage and conveying the layout of the property. Most importantly, the appraiser looks for any obvious features – or defects – that would affect the value of the property. Once the site visit is complete, an appraiser uses two or three approaches to determine the value of real property: the cost approach, the direct comparison approach and, in the case of a rental property, the income approach.
Appraisers get to know the neighborhoods in which they work. They understand the value of certain features of that area and use this information to determine which attributes of a property will make a difference in the value. Then, the appraiser researches recent sales, within the neighborhood or similar marketing area and finds properties which are “comparable” to the subject being appraised. The sales prices of these properties are used as a basis to begin the sales comparison approach.
Using knowledge of the value of certain items such as square footage, bathroom counts, waterfront view etc, the appraiser adjusts the comparable properties to more accurately portray the subject property. For example, if the comparable sale has a garage and the subject does not, the appraiser may deduct the value of the garage from the sale price of the comparable property. If the subject property has an inground pool and the comparable does not, the appraiser might add a certain amount to the comparable property.
You must notify us immediately as our firm has a 24 hrs notice policy. Without proper notice, prior to the site visit, you risk being charged a cancellation fee. Our firm will notify the parties involved in the assignment of your decision.
The appraiser provides an unbiased opinion of value which may or may not reflect the purchase price. The opinion of value is based on research and market knowledge. Lenders rely on the appraised value to secure financing on a loan-to-value ratio (80/20 or 75/25 etc). In the event the appraised value comes in higher, the lender will finance at the purchase price. The appraiser owes its duty to care and diligence to the lender and/or financial institution.
Northern Ontario Appraisals LTD.
