House Appraisals: Do You need One?

It’s important to understand what a house appraisal in Ontario can and can’t do to impact the home selling process. An appraisal is the process of determining the value of your home by a professional who is unbiased and impartial in their judgment. This is important in real estate transactions, such as home purchases and mortgage refinancing, as it helps to ensure that the home selling price is an accurate representation of the home’s condition, surrounding location, and neighbourhood.

How Can a House Appraisal Help?

An appraisal is helpful to ensure that the homebuyer is not paying more than the fair market value of the home. This protects the buyer from overpaying and ensures that the lender is not taking on a large amount of risk. In a mortgage refinancing, an appraisal is essential for the lender to determine the amount of funds that can be borrowed. In both cases, the appraisal helps the lender ensure that the homeowner is not borrowing more than what the home is worth.

When to Do A House Appraisal

In a traditional Real Estate transaction an appraisal takes place right after the buyer and seller have agreed on a price and an agreement has been signed. After all the details regarding the agreement have been finalized, the lender will send an appraiser to determine the value of the home. However, as a seller, you can also choose to get an appraisal done before the buyers approach you in a pre-listing appraisal. This can remove any unpredictability of a lower appraisal after an agreement has been signed.

Increasing Value Before an Appraisal

In order to increase the appraised value of your home, you can do some renovation. However, it is important to note that renovations which relate to taste and their value is subjective are likely to increase your home price by less than their cost. While renovations which are improvements by objective measures are likely to increase the appraised value by more than their cost. You can use the greener homes initiative to subsidize your improvements while increasing the appraised value of your home.

Is A House Appraisal Useful?

A home appraisal can also be useful to determine the list price for sellers. However, if the appraisal is done afterward and the appraised value is less than the list price, sellers might need to reduce the price or get another appraisal. Sellers can also choose to opt for an all-cash deal where an appraisal is not required.

Cost of a House Appraisal in Ontario

The appraisal process can cost anywhere between $350 – $750 and is usually part of the closing costs of the transaction. There are several factors that can impact the value of your home, including home amenities, comparable properties, location, and market trends. The appraiser will consider all of these factors when determining the value of your home.

As a seller in Ontario, understanding the appraisal process and how it impacts your home sale process is crucial. By understanding the factors that can impact the value of your home, you can make informed decisions about the sale of your home and ensure that you get the best possible price for it.