What You Need To Know!

Source: Hannif Highclass
Publish: Toronto Real Estate Blog: Feb 29, 2012

The question “How much is it worth?” is subjective, and the answer depends on who you ask.
A seller might think a property is worth more for sentimental reasons.
A buyer might think it’s worth less because of the shape it’s in.
A lender cares only about how much they can sell it for if they end up owning it in foreclosure.
An appraisal will help to establish the market value of a property and the likely sales price it would bring in an open and competitive real estate market. Your lender MAY require that an appraisal be done.

The Appraisal Foundation – USPAP (Uniform Standards of Professional Appraisal Practice) defines an appraisal as
“The act or process of developing an opinion of value.” This valuation is a determination of your property’s market value – what it will likely sell for on the open market.”

You don’t want to confuse an appraisal with a comparative market analysis (CMA) given to you by a Realtor®. Realtor®s use CMAs to estimate realistic prices, and a good agent often comes very close to the appraisal price. But the appraisal is much more detailed and can be used by the lender in determining how much they will lend. (if needed)

NOTE: While Home Inspection are associated with the buyer’s side of a home-buying transaction, It is (at times) advisable for the Seller to get a Home Appraisal done on his own BEFORE listing the property. This is especially true in a buyers market and/or when the house is unique. Sellers in this circumstances will be able to attract buyers and get on offer faster for there property if the listed price is at or below the appraised value.

Here are a few pointers when it comes to home appraisals for sellers.

Home Seller Services
If you are going to sell your home you would be wise to invest in a professional appraisal. Professional appraisals do not cost money, they pay in the long run! We are not talking about how much you have invested in your home, how much you paid for it, or how much you want for it. We are talking about the true market value of your home.

Many people are surprised when they find out that the market value of their home is much more than they thought, so investing in a professional appraisal actually allowed these people to receive several thousand more dollars than they thought they would when their home was sold. Others have an inflated opinion of their home’s value and an appraisal helped them to realistically price their home in order for it to sell. An overpriced home will not attract buyers, which means no offers and no closing and that you have wasted valuable time, money, and efforts.

In addition an appraisal will help you by pointing out needed repairs and visible deficiencies in the property which will allow you to correct these items before placing it on the market.

For-Sale-By-Owner (FSBO)
Homes that are listed for sale by the owner, without the assistance of a real estate agent, are known as FSBOs (pronounced FIZZ-BO). Selling your home “on your own” will require a significant amount of “homework” if you’re going to do it right.

It’s very hard to be objective about your own home because of your emotional attachment to it. One piece of advice that is consistently given by the experts in selling your home FSBO . . . .

Do NOT “Overprice” Your Home!
In addition to helping you set a realistic selling price so your home will attract buyers, a professional appraisal is very valuable as a negotiating tool once you have a potential buyer. It gives you something concrete to show your buyer. It’s an independent third party’s opinion of your home’s value, and not just you saying how much it is worth. Potential buyers know you have an emotional attachment to your home and will be far more likely to give credibility to a professional appraiser’s value opinion than yours.

How to Get the Most out of a Home Appraisal

“Everything needs to look clean and ship shape,” says Hannif Highclass, broker of record with Genie Sabre Realty “The appraiser looks at the house as the buyer would, from the front door on in.”

• Start with the outside of the property. Mow the grass. Trim the hedges.

• Hide everything that looks like work. Put away hoses, rakes and shovels.

• Then walk up to the front stoop and look at the front door. There should be no peeling or fading paint. No spiders. No tears in the screen or loose door handles. These small things send a signal to the buyer’s subconscious to ask, ‘What else should I be looking for?'” he says. “You want everything to be crystal clean and crisp.”

• Inside, a home seller has one chance to make a first impression on a buyer. Make sure the house is ready. Paint if it needs paint.

• If it needs new carpet, put it in. A buyer will decide whether or not to look further than the entryway within five to 15 seconds of stepping through the front door.

• Make sure nothing looks unkempt. No dirty clothes anywhere. No odor. Odors will kill you.

• You will lose them right there,” he says. “A home has to be clean, and not your normal Saturday clean, but a deep, spring clean. Marine boot camp clean. Clean sells.”

• In addition, de-clutter everywhere. “Clear off all counter tops,”

• “Orderly closets are absolutely vital. Clear out extra clothes, even if you have to rent a storage space. Clear off the floor of the closet. You need to be able to see at least 75 percent of the floor to create a sense of spaciousness.

• Are there tons of stuffed animals in the children’s rooms? Watch what your children actually play with for a couple of weeks. Then, remove and store whatever isn’t actually in use.

• Major improvements aren’t necessarily an advantage, “Value is a subjective thing. Every buyer has a hot button.”

Once the appraisal is completed, be sure to get a copy of it. The appraiser can tell you what specifically can be tackled to increase the home’s marketability.

Hannif Highclass offers this final advice for home sellers in today’s buyer’s market:

• The greatest exposure is in the first two weeks a house is listed, so don’t rush to the market.

• Be out of the house when prospective buyers come for a showing. They won’t feel free otherwise to open closets and really look closely at what the home has to offer.

• Turn on every light. Closets. Over the stove. Basement. Make sure every window blind is open. Especially in fall and winter.

• This will help the agent show the house and sends a signal to the buyer, “Take a good look.”

Find a qualified appraiser

If you’ve weighed the costs and benefits of a home appraisal and decided to go ahead with the process, the next step is to find a qualified, independent appraiser.
Getting an appraiser with some sort of professional designation, such as the Appraisal Institute’s MAI, SRA and SRPA, helps.

Check out the list of appraisals from below

Assurance Appraisals Inc       (416) 471-0176            http://www.assuranceappraisals.com

Reliable Appraisal Services   (905) 712-8887            http://www.reliableappraisal.ca

 By being properly prepared and asking the right questions both before and during any home inspection, you will be better protected against costly surprises after closing.

Related Articles of Interest
House sold subject to home inspection
20 Things to look for in a Home Inspection

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