Q. Are you a Certified Appraiser?
A. Yes. I attained my Market Value Appraiser (MVA-Residential) Designation from the Canadian Real Estate Association (CREA), in 1991. This designation uniquely stipulates that the Appraiser, in addition to Professional Appraisal Activity, is required to be active in the ‘transactional side’ of the real estate market- based on the premise that direct activity in the real estate market will lead to an enhanced understanding of Fair Market Value of the subject property in real time.
I’ve continued to be an active Realtor since becoming licensed by the Real Estate Council of Ontario (RECO) in 1980. I have been a member of the Toronto Regional Real Estate Board (TRREB) since 1978. This has allowed me to remain abreast of current real estate market listings and sales, in real time.
Q. What are the Main uses of Your Appraisal Reports?
A. The main uses of these appraisals are:
Capital Gains Tax Calculation
Family Law / Divorce / Asset Distribution
Estates / Probate
Estate Planning
Historical Values
Internal / Family / Private Sales
Q. What distinguishes your appraisal work?
A. My appraisals are thoroughly researched, carefully considered and clearly presented. They are completely unbiased and clearly demonstrate the property’s Fair Market Value (FMV).
The appraisal report itself is original and not the typical boiler-plate form. It allows room for specific explanations by way of summaries and charts.
I personally handle each aspect of the research, analysis, and conclusions of my appraisals whereas many appraisal companies engage articling appraisal students to inspect the property, research the data, and draft the report.
Q. What steps do you take when appraising a home?
A. Value is approached from various vantage points after a careful inspection of the subject property.
Review of overall local market activity. This includes year over year, month over month analyses, as well as reference to the Home Price Index (HPI).
Review of the neighbourhood’ and ‘community’ markets. (Reference is made to the MLS District and contiguous districts where appropriate), as well as the specific community. My experience over the past 4 decades in the Toronto real estate market helps me in determining where ‘comparable and relevant’ areas begin and end. Generally, a total of 25-50 properties are considered in the initial research.
After several reviews of the larger list of comparable properties, focus is then given to the comparison of the most similar and most recently transacted properties in the Direct Sales Comparison Approach to Value.
Q. What is "Fair Market Value", technically?
A. Fair Market Value (FMV) is the most likely price that a property should sell for in a competitive and open market, under all conditions requisite to a fair sale; the buyer and seller, each acting knowledgeably and assuming the price is not affected by undue, anomalous factors. Implicit in this definition is the consummation of a sale 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;
A reasonable time is allowed for exposure to 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.
Q. Can you provide Fair Market Value for a historical/retrospective date?
A. Yes. All of the principles of Fair Market Value remain, though the effective date is in the past. My data base goes back to 1971. Often, there are historical photographs available of the property. We are occasionally asked to appraise a property for up to 5 distinct dates.
Q. Can we request a value that is high or low.
A. No. In fact, I will be unable to take the assignment if the topic of value, value direction, or other opinions of value comes up, even generally, prior to completion of the appraisal.
All work is done on a strictly neutral/unbiased basis. I am hired in situations where the client wishes to know the fair market value as of a specific date.
The ethical foundation of my work is reflected in Appraisal Institute of Canada’s CANADIAN UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE .
My appraisals are requested in matters of mediation and all parties will be assured that there are no agendas or side-discussions taking place from the beginning to the end of the assignment.
Q. Distinguish between your “Appraisal” and a Realtor’s “Free Evaluation”?
A. We all receive real estate promotions in our doors offering "free, no obligation appraisals". Agents are simply doing their jobs and hoping for your business now or in the future.
In that situation, the agent typically supplies an informal opinion of value and a marketing plan for your consideration. It is sometimes thin on analysis and context, Agents can provide reliable opinions of value even though they are not recognized as appraisers.
Typically, legal situations require the work to be done by an accredited appraiser.
A Fair Market Value Appraisal, is a formal demonstration the market value of a property based on thorough research, an understanding of market conditions and carefully weighed analysis.
Q. How long does it take to prepare an appraisal?
A. Comfortably, 3-5 business days.
Q. How many comparable properties are considered in your research for the appraisal?
A. Typically I will go back in time up to 2-3 years in the subject neighborhood or condo building , looking for similar type and style of homes.
The first list is typically 20-30 comparable properties and they are saved on-line for careful examination.
This group is gradually reduced to the 10 most similar and most recent sales, and then 3 most recent and/or comparable sales..
I do not recycle my research. Every assignment is researched uniquely and equally.
Each appraisal is approached freshly as each property and each market period has its own unique characteristics.
Q. Distinguish between a Home Inspection and an Appraisal
A. The Market Value Appraisal is intended to capture the value of a property as of an specific effective date, based on market research of comparable sales, relevant economic conditions, and relative values of various elements of the property.
A Home Inspection, on the other hand, is intended to analyze the 'functionality' of the property considering structural, mechanical, and systemic components.
The Home Inspector may refer to costs of repair, but matters of real estate property values are not a part of their expertise.
It would be highly unusual for a Home Inspector to comment on the value of the property just as it would be unusual for an appraiser to comment on the more latent elements of the subject property.
Q. Is there anything I have to do before the inspection?
A. There isn't a lot required of the client before an appraisal inspection. Generally speaking, the home in its normal condition is sufficient for appraisal purposes.
It is very helpful if there is easy access to the heating cooling systems, electrical panel, garage, and all of the rooms of the property.
If there is any ongoing work, it would be useful to discuss the estimate to bring the project to completion.
Other matters like realty taxes, assessments, area sales are already on file with the appraiser.
Q. Does the client have to be at the property during the appraisal?
A. The client frequently arranges to meet at the property.
Sometimes a relative, neighbor, concierge or tenant provides access and payment on the client's behalf.
Lockboxes are often used to permit access.
Q. Do you discuss the appraisal results with anyone else?
A. No. All work is confidential.
The appraisal is for the client's information only and can be discussed with a third party only with the client's express permission.
Q. Do you appraise condos, co-ownerships and co-ops?
A. Yes. While they are 3 distinctly different types of property ownership, the approach to value is essentially the same.
Q. Do you appraise out-of-town properties?
A. Time permitting, yes- though on a very limited basis.
I am licensed to appraise across the Province of Ontario and sometimes appraise homes in Toronto's suburbs within 1 hour of Downtown Toronto. (Schedule dependent)
Generally speaking however, you're always best advised to hire an appraiser who specializes in your particular area and location.