Regardless of whether you happen to be the buyer, owner, or seller of a property, it’s important to understand the significance of appraisals and how they affect the inherent value of the property in question. After all, if you fail to procure an accurate appraisal, there isn’t much to stand between you and potential losses during the sale or purchase of a particular property.
So, if you happen to be interested in getting a real estate appraisal in Toronto, for instance, feel free to use this article as an introductory guide to understanding the ins and outs of the modern appraisal process.
What Is an Appraisal and When Do I Need One?
In its simplest sense, a property appraisal is essentially an unbiased expert assessment of the intrinsic value of a home or commercial business. Due to the fact that appraisals are an integral part of any property transaction, professional appraisers are commonly called upon during the following situations:
- When purchasing any type of property with a residential or commercial mortgage.
- When refinancing or restructuring an existing property loan.
- When selling a property to anyone other than a cash-only buyer.
How Does the Process Work?
House appraisals in Toronto serve the distinct purpose of ensuring that homeowners aren’t overpaying for their properties because the collateral for a given mortgage contract is almost always the actual structure in question. An appraiser will take into account the home’s general physical condition and geographic location along with any accompanying fixtures, features, and add-ons when ascertaining the appraisal value. Although current market trends and recent property sales also play a big role as well.
This examination ensures that lenders can recoup the loan amount in the event of a mortgage default while concurrently insulating the homeowner from inequitable property valuations and exorbitant interest rates.
Home Appraisal and Home Inspection Differences
There are some major differences between a home appraisal and a home inspection which many people seem to confuse. A home appraisal is not a home inspection and the two jobs will need to be carried out by two separate professionals.
As mentioned above the home appraiser will consider general condition, number of bedrooms/bathrooms, materials of fixtures, location and market value; however they will not give an accurate indicator of the properties deeper structural condition. For this task, a home inspector is needed and their main role is to make sure there are no nasty (financial) surprises waiting for the new owner once they have purchased the property. The home inspection will cover things like structural issues and damp problems along with making sure the electrics and plumbing are all in working order.