Not surprisingly it is confusing to homeowners to hear about different ways to determine what their home is worth. This will help. In a nutshell:
1. Appraisal. An appraisal is done by a professional appraiser often appointed by lawyers and/or banks. Appraisers do rely on real estate information and keep a close relationship with Realtors. They base their findings on different formulas to come up with a value on the home based on comparable past sales, land size, square footage, home condition, etc.. In divorces, estates, inheritances, mortgage lending and other legal discussions this is the route often needed. If you are refinancing, for instance, the bank may certainly want your holdings appraised by a real, live professional going into your home, using hard data.
2. Assessment. This is the amount you are taxed on as a home owner. This information is not a reliable gauge of home value. For one thing, the sales information assessments are based on is sometimes 2 years out of date. More importantly, rarely does this involve anyone actually being in your home. You might have fixed your home up as a state of the art Taj Mahal and receive a low assessment based on averages for your home square footage. Do not be alarmed or excited about your assessment as it pertains to market value.
3. Market Evaluation. This is done by a professional Realtor and is perhaps the most useful for a real value discussion. A Realtor uses not just past sales, but their awareness of neighbourhoods, available inventory, market trends and a host of factors influencing the local market. i.e. Now some consideration to a challenged Alberta economy would impact Okanagan values.
So, when you want to know what fair market value is for your home, call a trusted Realtor. When you need a legal document for court proceedings, call a LOCAL appraiser. Don't sweat your assessment, if you think its out of line, you can appeal....but in most cases it is undervalue and you may wish to buffer your tax burden by accepting a lower value on paper.
1. Appraisal. An appraisal is done by a professional appraiser often appointed by lawyers and/or banks. Appraisers do rely on real estate information and keep a close relationship with Realtors. They base their findings on different formulas to come up with a value on the home based on comparable past sales, land size, square footage, home condition, etc.. In divorces, estates, inheritances, mortgage lending and other legal discussions this is the route often needed. If you are refinancing, for instance, the bank may certainly want your holdings appraised by a real, live professional going into your home, using hard data.
2. Assessment. This is the amount you are taxed on as a home owner. This information is not a reliable gauge of home value. For one thing, the sales information assessments are based on is sometimes 2 years out of date. More importantly, rarely does this involve anyone actually being in your home. You might have fixed your home up as a state of the art Taj Mahal and receive a low assessment based on averages for your home square footage. Do not be alarmed or excited about your assessment as it pertains to market value.
3. Market Evaluation. This is done by a professional Realtor and is perhaps the most useful for a real value discussion. A Realtor uses not just past sales, but their awareness of neighbourhoods, available inventory, market trends and a host of factors influencing the local market. i.e. Now some consideration to a challenged Alberta economy would impact Okanagan values.
So, when you want to know what fair market value is for your home, call a trusted Realtor. When you need a legal document for court proceedings, call a LOCAL appraiser. Don't sweat your assessment, if you think its out of line, you can appeal....but in most cases it is undervalue and you may wish to buffer your tax burden by accepting a lower value on paper.
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