Frequently Asked Questions
As professional real estate assessors, our experts at Palmer Appraisals want to make sure every appraisal is clear, accurate, and accessible to you.
Here are just some of the frequently asked questions we get regarding real estate appraisals & assessments. If you have a question that isn’t answered here, please feel free to contact us and we’ll do our best to assist you.
What is a residential real estate appraisal?
A residential real estate appraisal is an appraisal of the market value of a property. Market value is the most probable price that a typical purchaser will pay in a competitive and open market.
Your financial institution may require this appraisal to establish a minimum value if you are using your home as collateral for a mortgage. You might also require an appraisal for legal purposes such as divorce or estate planning, or for tax purposes like establishing capital gains. You may also want an appraisal for personal interest, or to decide if proposed renovations are worth the investment.
What is a CMA?
If you have a real estate agent, they may have already provided you with a comparative market analysis (also called a CMA). A CMA is a report based on MLS (Multiple Listing Service) information provided to real estate agents in the area.
CMAs are used to help homeowners and their REALTOR® determine the best asking price for a property and to have an idea of likely offers. CMAs will not be accepted by lenders for mortgage valuing. Only an official property appraisal by a designated appraiser will be considered by a financial institution.
How much does a property appraisal cost?
The fee for a real estate appraisal depends on the type of property involved. You can contact us for a quote specific to your property before starting the appraisal process.
What’s the difference between a bank appraisal and a real estate appraisal?
A lender or bank appraisal has specific requirements set by the bank, which an appraiser must follow in order for the appraisal to be valid.
A real estate appraisal can be a private appraisal request that does not have to follow bank requirements.
The bottom line of both a real estate appraisal and a bank appraisal is the same: determining the property’s market value.
What’s the difference between a property assessment, a property appraisal, and a home inspection?
A property assessment is performed for property tax purposes. For an assessment, there is no visit to the property. Property assessments are also dated July 1 of the year before you receive the notice, making them a dated value.
A property appraisal is typically performed for lending purposes. For an appraisal, a professional appraiser will pay a visit to your property to view the exterior and interior, as well as take photographs and measurements.
A home inspection is a thorough inspection performed by a certified home inspector, typically performed before a house sale. The inspector will investigate the home’s envelope, including attics, crawlspaces, and the roof, looking for structural and or cosmetic deficiencies.
In a real estate transaction, who orders the appraisal? Does my bank pay for it?
In most real estate transactions, the purchaser’s bank or lender will order the property appraisal.
Each lender is different in how they handle an appraisal and its costs. Some lenders may pay for the appraisal, some may ask the purchaser to pay for the appraisal, and others may pay for the appraisal out of the proceeds of the mortgage. Make sure to confirm who will be responsible for paying for your appraisal beforehand with your lender.
What goes into a residential appraisal report?
A residential appraisal report is based on the current condition of the property, analysis of current sales in the area, and cost information.
A typical report will include details about the property being appraised, including: location, site size, age of dwelling, upgrades to the dwelling, built-in features, etc. It will also include information about the current real estate market in the area, a calculation of the average time a property will be on the market before selling, and conformity to current zoning and municipal by-laws.
What’s the process of a home appraisal? What does an appraiser look for?
When you arrange for a home appraisal, an accredited appraiser will visit your property and perform an interior and exterior viewing, take exterior and interior photos, and take exterior measurements.
A proper real estate appraisal requires the real estate appraiser to enter the home to conduct the appraisal, as the condition of the home is an important part of the property’s final market value.
An appraiser will inspect the building’s condition, including finishing (such as flooring, windows, counter tops etc.), roof material and age, mechanical features, exterior influences, and other features that typically affect property value.
Once complete, your appraiser will write up a final report and deliver it to you in PDF format via email.
How do I prepare for a house appraisal? Do I have to be at home?
Before your appraiser arrives, make sure your home is tidy and accessible. The appraiser will require access to all rooms, as well as your hot water tank, electrical panel, and furnace. If there are additional upgrades or features that the appraiser may not be able to see, provide them to the appraiser as a list. This will result in a more accurate property valuation.
You do not need to be home for an appraisal. Palmer Appraisals has lockbox access and simply needs to be able to enter the building. If you have pets, please notify the appraiser ahead of time and ensure they won’t hinder the appraisal process.
In general, an average-sized home appraisal will typically take 20-30 minutes. You can confirm with your appraiser beforehand how long they think the viewing will take.
How long does it take for a buyer to get an appraisal report? When do property assessments come out?
A property appraisal report will typically be delivered within 1-2 business days after the property viewing has been completed. However, appraisals can also be provided on a rush basis with enough advanced notice.
Property assessments for tax purposes are released in January, but are based on July 1 the prior year.
How is property value determined?
Generally, two methods are used in combination to determine a single market value for the subject property:
Sales Comparison Approach
By comparing the property to similar properties that have sold in the area, the appraiser can estimate what the market will bear. Since no two properties are exactly alike, adjustments must be made to different features, like lot size, location, views, size of dwelling, condition of dwelling, etc. What comes out of these adjustments are figures that show what price the comparable properties would have sold for if they were identical to the property being appraised.
The appraiser uses industry-recognized cost manuals to estimate how much replacing the residence would be.
What’s the difference between assessed value, market value, and tax assessment value in BC?
Assessed value and tax assessment values in BC are determined based on the previous year’s data, so they do not represent current market values.
Market value is the most probable price that a typical purchaser will pay in a competitive and open market, as of the current date.
Is my property’s appraised value the same as its fair market value?
While there are several different types of appraisal values, including market value, retrospective value, replacement cost, etc., a typical residential appraisal does focus on representing the property’s fair market value.
How long is a house appraisal good for?
A property appraisal is typically good for three months as the real estate market is always rapidly changing.
Still Have Questions?
We’re always happy to help.