Before you enter the real estate market, it is important that you have some understanding of the local market in the area where you are thinking of buying or selling. You need to make an effort to educate yourself about recent market trends in your neighbourhood, your financial options and the services and insights that are available to you through the use of a qualified and licensed Realtor®, so that you know you are making the right move.
One of the things you should know about is the difference between a market or property evaluation (which most real estate sales reps are willing to complete free of charge), and a formal appraisal, which may be required if you’re dealing with a bank or lawyer.
A market evaluation or property analysis will provide you with a comparison of properties similar to yours that have been listed for sale, sold or expired in your area. A cross-section like this can give you a good idea of general market activity in your neighbourhood and provides you with a point of comparison for your property – it should help you see how your home measures up against your neighbours and help you determine roughly how much you can expect to sell for.
An appraisal, however, is a different animal. Normally, lenders will require that an appraisal be completed by an independent and certified appraiser who has been approved by their institution and charge the client (you) for the cost of the appraisal regardless of the result. Lawyers are sometimes able to have a real estate agent complete an appraisal to suit their needs (for example to settle a divorce or estate), but it is a much more detailed and complex evaluation involving both direct comparison and cost approaches of valuation, which requires at least a few hours work, so most agent charge a fee for their time. Appraisals look at details related to your specific property – square footage, overall condition, number of bedrooms/bathrooms, extras such as fireplaces, heat source, pools, etc – to paint a complete picture for the lender and provide them with an unbiased opinion of the current market value of a specific property on a specific date.
As with everything in real estate, education and understanding are key. As a real estate professional, it is my job to make sure that buyers and sellers alike fully understand the transaction they are undertaking and feel comfortable with it. Understanding whether you need a market evaluation or an appraisal will get you one step closer to ensuring your real estate experience is a positive one. If you’re considering buying or selling a property, make sure you work with a Realtor® who has your best interests at heart and will take the time to make sure you understand and feel comfortable at each step along the way. Put my award winning customer service to the test and contact me today to discuss your real estate needs!