Can I use service of an appraiser after I purchased a property conditionally?
Yes, It is a wise way to complete a real estate transaction. In-fact buying a house is the most expensive purchase for most people and hiring an appraiser will give the peace of mind to the potential purchaser. Having an appraisal clause protects the purchaser in the event the appraisal comes in below the agreed upon purchase price. If the appraised value is less than the purchase price, the purchasers now will have to come up with the difference between the appraised value and the purchase price if they are borrowing money from a lender.
Example Clause that can be added on the purchase and sale agreement:
This offer is conditional upon the purchasers having an appraisal completed in the next five business days with the final estimate of value being either equal to or greater than the purchase price. If the appraised value is lower than the purchase price the purchasers shall have the sole right to cancel this transaction with all deposits being returned in full without any deduction or penalty and this offer shall become null.
How do we prepare for an appraisal appointment?
Prior you appraisal appointment it will be helpful to have your latest property assessment that was prepared by the Municipal Property Assessment Corporation (MPAC) available as this document can be extremely helpful for the appraiser as it contains: the year the dwelling was built, building size, lot size, legal description and assessment. Also If you have a builder’s floor plan make that available to the appraiser, Appraiser will take a picture of the plan and will attach it to the report.
It would be great making all rooms, basement, cold room, garage, sheds and out buildings accessible for appraisal inspection. The hydro panel and furnace area should be accessible for a quick inspection. It is always wise to make a list for the appraiser of any major upgrades that have been completed and try to include the year when the upgrades were completed and the approximate cost. If the appraisal appointment is during the winter season and there is snow make sure the appraiser has access into the rear yard. If there is a sale of a property that you would like to be considered in the report provide the appraiser with the address. At the end of the appraiser’s inspection ask if you can take a minute to review the room count, bathroom count and upgrades with the appraiser.
There are some houses similar to my property in the neighbourhood currently listed for sale; can I assume my appraised value is the asking price of the similar properties?
Basically a real estate appraiser will base the appraised value on the Sold properties that are comparable with the subject property. The listed properties does not show the real appraised value of the properties, in some instances the realtors list the property some percentage over the real property value to leave some room for negotiations. Also some realtors intentionally list the property lower than fair market value to attract more offers. Therefore the list price can not reflect the appraised value of your property.