A Guide to Understand Residential Appraisal

Most people approach an appraisal company in Toronto when preparing to buy or sell a home. Does this sound like you? Understanding the appraisal process is important if you want to get the most from it. Here’s a short guide on the basics you need to know about residential appraisal services and working with an appraiser.

Why is an appraisal important?

It’s in the best interests of the bank, the seller, and the buyer to get an appraisal for the following reasons:

The bank – Proper appraisal is critical in underwriting. If the loan is worth more than the home’s market value, the bank may find it challenging to recover their investment if the buyer defaults on their mortgage. With a residential appraisal, a bank or lender can determine the market value of the property, decide on a loan amount, and use the home as a collateral more effectively in case the buyer is unable to pay for the mortgage later on. Sometimes, the buyer has to arrange and pay for the appraisal themselves, with consent from the lender.

The seller – A seller might want to call a property appraiser in Toronto before selling their home and setting the starting price.

The buyer – A certified property appraisal lets the buyer know how much the home they want to buy is truly worth. It can also help during the negotiation process.

How is a residential appraisal done?

The property appraiser will walk through the property to take note of all the elements that may reduce or increase the home’s value in their final report. For instance, this may include the age of the roof and the condition of the structure.

Next, they will determine whether to use the Direct Comparison Approach, Income Approach, or Cost Approach based on what’s most appropriate for the property.

The end result is a complete appraisal report which will show the property’s accurate market value.

A trusted appraiser in Toronto

Appraisal Hub Inc. offers comprehensive residential appraisal services in Toronto. You can count on our unbiased and accurate property appraisal reports.