An appraiser provides an unbiased opinion of market value at a determined point of time. The most common reasons a home owner or investors may have an appraisal conducted is for mortgage financing/refinancing, separation/divorce, estate matters, capital gains, before listing a property for sale, before purchasing a property, private home sales, home equity loans, real estate investments, relocations, or tax assessment appeals.
What is an appraisal?
Vacant Land
New Construction or Additions
Residential Homes & Cottages
Multi-family up to 4 units
Rural Acreages
Condominiums
The most probable price which a property should bring in a competitive and open market as of the specified date under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably and assuming the price is not affected by undue stimulus.
Implicit in this definition is the consummation of a sales as of a specified date and the passing of title from seller to buyer under conditions whereby: buyer and seller are typically motivated, both parties are well informed or well advised, and acting in what they consider their own best interests, a reasonable time is allowed for exposure in the open market, payment is made in terms of cash in Canadian dollars or in terms of financial arrangements comparable thereto, and the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.
Source: Canadian Uniform Standards of Professional Appraisal Practice
What is Market Value?
How does an appraiser determine market value?
There are three approaches to value used by appraisers. They are the direct comparison approach, the cost approach and the income approach. One or more of these three approaches is used in any appraisal.
The cost approach uses the cost of land plus the cost of reproducing or replacing the home and subtracts the amount of depreciation of the home. This approach is mostly useful when valuing new homes.
The direct comparison approach is the most valuable in most residential appraisals. It looks at similar properties which have sold in the subject property's market, and then these sales are adjusted for differences between the sales and the subject.
The income approach is generally used for commercial properties. In this approach the anticipated benefits (cash flows and reversion) are converted into a property value.
What does it cost?
Use the Request a Quote form to let us know your specific needs and we will provide a quick quote in 24 hours. We are currently booking inspections a week away and then most appraisals will be delivered to you as a PDF via email is one week or less. At Kemp Appraisal Ltd. we take the time to understand your unique situation. Let us be your trusted partner on your valuation needs.
The quote is based on your home's location, size, unique influences or features, current or retrospective dates for the market value(s) and purpose of the appraisal (divorce, second mortgage financing, assessment appeal, etc.). Once you have confirmed you want to proceed, an appointment will be scheduled with Laura Kemp, P.App., CRA to view your home. The inspection will involve an exterior and interior inspection of your home, photos and measurements. Most inspections take approximately 1 hour.
After the inspection the appraiser will prepare your report and the final report will be emailed to you as a PDF. Your report will consist of on average 25 to 30 pages with a description of your property, interior and exterior photos, a location map, plot plan, floorplan, zoning map, assessment records, building permits, and the appropriate approaches to market value.
How is an appraisal different than a real estate agent’s opinion of value?
An appraiser has no vested interest in the property transaction taking place.
Often financial institutions, lawyers, courts, Canada Revenue Agency and other government agencies will require an Appraisal Institute of Canada designated member (CRA or AACI) prepare your appraisal report. This is due to the extensive educational training and mentor program the Appraisal Institute of Canada has in place.
Designated members of the Appraisal Institute of Canada have an Undergraduate Degree and then undergo a minimum of 7 specific University level appraisal courses through the University of BC, Sauder School of Business. In addition members of the Appraisal Institute of Canada carry superior liability insurance.
An appraisal report is often a more detailed report overall than an opinion of value.
What is the Direct Comparison Approach to Value?
The direct comparison approach is a method used in residential appraisals to estimate a property’s market value by comparing it to similar properties (called comparable sales or “comps”) that have recently sold in the same area.
Adjustments are made to the sale prices of the comparable sales to account for differences in features such as gross living area, age, condition, lot size, location, basement finish, garages, and other influences or amenities, ensuring the comparison reflects the subject property’s specific characteristics.
This approach relies heavily on current market data and is considered one of the most reliable methods for valuing residential properties, as it reflects the price that typical buyers are actually willing to pay under normal market conditions.
