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Frequently Asked Questions

 

How accurate is the appraisal? Is there a time qualification on the appraisal?
An appraisal is an Opinion of Value so to a certain extent there could be a range of values expressed by different appraisers. There are also different types of value. The most common value calculated is Market Value .However, depending on the purpose of the appraisal other values developed could include Insurance Value, Liquidation Value, Investment Value. Provided consistent methods are applied there should not be any significant difference in value between appraised values.

 

What would be the fastest or easiest thing a home owner can do to increase the value of a property?
Presentation is important – the appraiser is ultimately viewing the property from the perspective of how much would someone pay for this property. Fixing minor faults such as leaky faucets, squeaky doors, minor paint touch ups and generally tidiness can help the appraiser develop a favorable opinion.

 

What do you look for to determine the value of a property?
There are several factors considered in determining the value of a property- the style, age, maintenance, floor plan , facilities, lot  location and size, any positive or adverse influences external to the house , for example, high voltage power lines, streets or highways carrying high volume of traffic, a golf course, lake front  and others  can impact value.

 

What are the important aspects of the appraisal and the process that every home owner know?

The appraiser is an independent professional who has no preconceived opinions of your home. They are not attempting to “make a deal”. Experienced appraisers view hundreds of houses in a year, so they can make relative comparisons between different houses. The process is further backed by extensive market research relating to the property, the neighborhood, the real estate market and the underlying economy of the region.

 

Is there anything a home owner should do to prepare for an appraisal?

The homeowner has intimate knowledge of the property, whereas the appraiser is visiting for maybe an hour, so it is helpful to have certain documentation available for the appraiser to view – copies to take for the work file are even more appreciated. The Real Property Report will define the lot size and orientation, Municipal tax notices, a list of the improvements and upgrades already completed in the property.  Future plans, while interesting, do not have any impact on the outcome of the appraisal – unless there is a specific requirement to project a value on the completion of future improvements.

 

What are the major aspects that seriously devalue a property?
Poor maintenance or presentation, a dysfunctional floor plan, for example , modern homes expect  a ratio of  bathrooms to bedrooms of at least 1:2. Older homes frequently may have only 1 bathroom to 3 or 4 bedrooms. Another example is a poorly located access to the kitchen, pantry or store from the driveway or garage for transportation of shopping from car to ultimate storage area.

 

Likewise, what aspects can add value?
A functional floor plan,good lighting and presentation, regular maintenance and updating, good location with convenient access to essential services.

 

Is there a specific designation or training appraisers should have? When I hire an appraiser, what credentials should I ask for?
In Canada there are 2 recognized appraisal organizations conferring designations to members who have completed the required practical and educational requirements. The Canadian  National Association of Real Estate Appraisers and the Appraisal Institute of Canada. Additionally, certain provinces require that appraisers be provincially licensed. If an appraiser possesses any of the designations, DAC, DAR, CRA or AACI, that appraiser has completed successfully the appropriate training and education.

 

How does the location or neighborhood impact the appraisal?
Location is important –typical   beneficial features are lakefront or lake access, golf course, green space, convenience to services; negative features could include a busy highway, high voltage power lines, industrial and commercial activity close to the property.

 

What are you comparing properties to?
The appraiser is initially comparing the property to similar styled   properties in the immediate    neighborhood- if there are no suitably comparable properties then comparisons are made with similar properties in other locations with similar features. Influences such as style, age, location, facilities, construction quality are just some of the factors considered.

 

Where do you get your latest information regarding current market conditions?
Generally, most reference is done to the Multiple Listing Service operated by the local real estate board. On rare occasions appraiser may require to investigate other sales through the services of Land Registry or real estate services or agencies which trade properties, although this is a rarity, especially where residential properties are concerned.

 

What part of the appraisal has the biggest impact on the appraisal? (i.e. neighborhood, features, level of upgrades, completion).
The appraisal process is a holistic  approach and each of the above contributes to the final  conclusion of value – however, if I had to pick one in particular I would say the level of maintenance and upgrading  evident at the property probably carries most weight.


 

What are some of the things appraisers do not take in to account when making their evaluation?
As stated previously, the appraisal process is a holistic approach including all factors which impact value – however, appraisers are not inspectors from “Good Housekeeping” so the homeowner should not get stressed if there is a little bit of untidiness evident!

 

What’s the most common question the appraiser is asked?
“How much is it worth?” While that is the primary purpose for undertaking the appraisal a certain value cannot be expressed at the time of viewing, without undertaking the research referred to earlier.

 

What’s the most important question you are rarely asked?
“To improve value what would you suggest?” The appraiser is experienced in viewing many homes as well as being well versed in what features and upgrades are popular in the market.

 

Is this an objective or subjective process?
Both! An independent appraisal is predominantly an objective process, applying varying disciplines and observations to determine value. However, as with most activities involving people there is a subjective element which should be at a minimum.

 

Why is it important for a person who is selling their property privately to have an appraisal done?
When a qualified real estate appraiser is engaged for a valuation assignment, you are retaining the services of a professional with wide ranging experience of what is currently happening in the marketplace. As an independent party, the appraiser has no special interest in valuing high or low but will present a market value based on proven methods, experience and knowledge. Additionally there is on record a professional valuation which may be required at a later date by tax authorities such as Canada Revenue Agency.

 

What is the difference between a fully developed basement and a partially developed basement? What are the impacts of each?
In reality there are very few “fully developed “basements as generally a certain area such as the mechanical room is not developed. However, basement finishes can vary extensively from, for example, one large family/rumpus room encompassing the entire floor area or include a number of bedrooms, bathroom, exercise rooms, home theatres- the list goes on and on. A partially finished basement is essentially where there is some development but a significant portion remains as it was when the builders left the property. The quality of development   also has significant influence on the value attributed.

 

Will I get a copy of the report?

That depends on who the client is? If you instructed the appraisal and are considered to be the client then you are entitled to a copy. However, if a third party, such as a financial institution ordered the appraisal and even if you are paying for it, the appraiser is required to deliver the report to them. Depending on the policies of the institution a copy may be provided to you.