How to: Getting your Home Appraised
Introduction
In many cases mortgage lenders will require an appraisal to be conducted on a property to help them determine the value of the property before a mortgage loan is approved and granted. Although this is the most common use for property appraisals, in certain cases people looking to sell a property also seek out the help of a professional appraisal service.
When it comes to selling a property, before initiating a sales process on a home, some sellers will opt to get their home appraised to establish a baseline value. In some cases, sellers may not have a clear enough idea of the value of their home while in other cases, they may own a property that is challenging to price accurately. A home appraisal can help in this regard.
The appraisal itself is conducted by a trained, certified professional who visits your home and examines various features of the property and the neighbourhood to determine a suitable valuation of the house.
What is an appraisal?
Before we proceed further on how to obtain an appraisal, it is worth exploring the meaning of a home appraisal. A home appraisal is a fair, unbiased estimate of a specific home’s market value at a given point in time offered by a professional real estate appraiser. The appraisal itself will involve analyzing a range of variables including recent sales information of other similar properties, the condition of the property, location, and other features of its surroundings that can either bolster or bring down the value of a home.
How do I get an appraisal?
To obtain a house appraisal on your property, there are several steps that should be taken prior to hiring a professional. These steps will help ensure that you are working with the right person or company, and positioning your house optimally to attract the best possible valuation.
Step 1: Research:
Particularly when it comes to home appraisals, a simple Google search is just not enough. If you have friends in the area who have used appraisal services for the purposes of obtaining a mortgage before, talk to them and find out if they have any recommendations for people or companies they can offer. Appraisers should be well-versed in the specific region of your property and have a good prior track record. Failure to hire someone with these characteristics can result in an inaccurate valuation that either drives away potential buyers or results in you receiving less from your property than what it is worth.
For property owners requiring home appraisals in Toronto and/or other parts of Ontario, there are online tools such as aicanada.ca/need-an-appraiser/find-an-appraiser/ that can be used as well to search for appraisal services by your region’s postal code.
It is also important to note that many mortgage lenders and banks will only accept appraisals from specific lenders. This is where a mortgage broker can help direct you and in most cases will order the appraisal from the right appraiser on your behalf.
Step 2: Due Diligence:
Once you have shortlisted some appraisers, it is important to vet them carefully to ensure that you are fact-checking information and finding someone who aligns best with your needs. To this end, you should ask for their professional designations, licensing and certification in Ontario, and other credentials. Once again, it is important to underline the importance of working with someone who is familiar with the region as there may be certain features of neighbourhoods that can push up a valuation. An appraiser who is not familiar with these features may miss these specific attributes in his or her appraisal.
Step 3: Beautify:
In a nutshell, treat the appraiser like a VIP guest. If a VIP was to come to your house, chances are you would want to clean up and make it look its best. So if your home is a bit, or very messy, clean it up and declutter. If there are any minor leaks, cracks or other faults that can easily be fixed, take the steps to fix them and address these issues before you invite the appraiser over. Additionally, some extra work to apply fresh paint over some marks, mow the lawn, and/or pull the weeds can go a long way in bolstering the value of the home significantly. However, it is also important to tread the line of economics. Wholesale upgrades to countertops and appliances may not necessarily boost the value of a home by a greater amount than their collective costs. For these big-ticket items, ensure that you are remaining cost-effective.
Step 4: Hire:
Once you have sourced and screened the appraiser and spruced up your home with the required clean up and/or property improvements (internal and external), you are ready to hire the appraiser. Before they arrive, make sure you have the documentation ready for all of the remodelling and/or upgrades that you have made to the home in the past 10 or so years. This will substantiate the visuals that they will see when they evaluate the home. In terms of appraisal costs, you can typically expect to pay between $350 to $550 in cities like Toronto and the surrounding suburbs, and in locations near other major cities across Canada for these services. For properties located in more remote regions or for more unique properties, then the appraisal fee can be higher.
Step 5: Final Checks:
In the few days before the appraiser arrives, you should ideally have all your major improvements completed including any paint jobs, appliance installations, etc. In the last few days, focus on the more minor cosmetic improvements like mopping and vacuuming the floors, tidy up and declutter, and wiping down tables, shelves and counters. It is also strongly suggested to leave the house during the appraisal to let the appraiser do their job best. An appraisal typically takes anywhere from half an hour to a couple of hours. Also, if you have a pet, it is best to take them with you when you leave the house. However, if you absolutely must keep them in the house, then ensure that they are put on a leash or in a crate (for larger pets) and that the appraiser is warned about their presence beforehand.
Step 6: Evaluate and Decide:
Once the appraiser has taken the pictures they need, they will get to work establishing their opinion on the value of the house. As a homeowner, you can ensure that you are championing the best features of your house to ensure that they are integrated and valued appropriately. Variables such as a good neighbourhood with easy access to transport, good schools, hospitals etc. are all brownie points for the value of your home. Once you receive the report, you can talk to your mortgage broker to get the paperwork ready to continue the mortgage application process in the case of a mortgage refinance or in the case of a new purchase mortgage.
Conclusion :
All in all, an appraisal can be useful in helping homeowners get approved for mortgage refinancing or home equity loans, and can be helpful to buyers with managing their expectations and gain valuable information when determining the right asking price. Before you hire an appraiser though, ensure that you have followed the steps in this article to give yourself the best chance of obtaining the appraisal valuation you have in mind. For best results, we recommend using a mortgage broker to ensure you hire the right appraisal that your lender will require.
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