The home appraisal process protects the interests of the lender, seller, and buyer. It provides an accurate and unbiased property appraisal report to help you make informed decisions about the home, especially if you’re planning to sell or buy one or you’re looking to refinance your mortgage.
But what can you expect from home appraisals? Let’s take a closer look at them and how appraisal firms can help.
Understanding the home appraisal
Appraisals are professional opinions of a home’s value, making them critical in the home-buying or selling process. Ideally, they must be conducted by certified and licensed appraisers from an established and reputable appraisal company to ensure unbiased and accurate opinions.
During an appraisal, the appraiser will go around your home to determine its dimensions, amenities, and overall condition. They may also take photos of every interior room, garage, and exterior. Appraisers in Toronto will also look into the transaction records of similar properties in the neighbourhood, particularly those that have recently sold. Based on those records and the home visit, the appraiser will arrive at a professional opinion of your property’s worth if you put it up for sale.
There’s more to the process
An appraisal company considers three approaches to determining a property’s value: direct comparison approach, cost approach, and income approach. Appraisers in Toronto will determine which of the three is most relevant to your property type.
Banks also rely on appraisal services to know that value, and with your credit history, assets, and income, they can determine the terms and how much they can lend.
An appraisal can help you get the best mortgage
Mortgage lenders want to ensure that the loan they’re approving isn’t beyond the property’s worth. By identifying the property’s market value, they can make the most of the property as collateral if you cannot pay. A certified property appraisal could also benefit you as a home buyer, so you know exactly how much the home is worth. This way, you don’t overpay, and you could consider renegotiating when possible.
Sellers may reach out to appraisal firms for a home appraisal, too. They can seek appraisal services to determine the best starting price before listing their properties.