Knowing a property’s market value is essential whether you’re buying, selling or refinancing. To get an accurate estimate, it’s important to have your home appraised by a certified professional.
While an appraisal typically costs a few hundred dollars, depending on the property type, it’s a small investment given that your home is probably your most valuable asset.
Curious about the cost of real estate appraisal services? Read on for more details.
What is the role of a certified appraiser?
A certified appraiser is a professional specializing in real estate valuation, tasked with determining a property’s market value. You may need an appraiser in various situations, such as:
- Buying or selling a home
- Mortgage refinancing
- Divorce settlements
- Capital gains calculations
- And more
In Quebec, the practice of a certified appraiser is regulated by the Ordre des évaluateurs agréés du Québec (OEAQ). As members of the OEAQ, appraisers must provide a valuation that is both neutral and impartial.
Depending on the situations, an appraiser may be appointed by:
- An individual
- A financial institution
- A municipality
- A court
Their expert opinion is the only one recognized by banks and courts.
What are the methods used to value your property?
When conducting an appraisal, the appraiser creates a detailed profile of the property. Depending on the property type, the certified appraiser will choose the most suitable method to ensure an accurate and precise valuation. In Quebec, the primary property valuation methods include:
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The sales comparison method: This is the most commonly used technique. It estimates a property value by comparing it to similar properties that have recently sold. The appraiser considers factors like location, size, number of rooms, floors, age, and other relevant characteristics.
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The income method: This method is typically used for income-generating properties, such as commercial or industrial buildings. It involves a detailed analysis of the property’s financial performance, including revenues, operating expenses, and potential for future income.
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The cost method: Although less common, this method is ideal for properties with a special purpose, such as unique or specialized buildings. It calculates the value based on the cost of the land, the cost to construct a new building, and any depreciation due to factors like age or wear and tear.
How is a building valuation conducted?
The property valuation process carries out by a certified appraiser is thorough and involves several steps. While the full process can be complex and time-consuming, it can generally be broken down into three main stages.
1. Property analysis
The appraiser starts by conducting a comprehensive examination of the property’s physical condition. This analysis helps assess the overall state of the building and identifies any repairs or renovations that may be necessary. These factors can influence the market value of the property.
The physical assessment typically includes a close look at various aspects of the property, such as:
- Number of rooms
- Presence of a garage
- Whether the property has a pool (in-ground or above-ground)
- Total habitable area
- Type and condition of the exterior cladding
2. Use of valuation methods
After completing the physical inspection, the appraiser moves on to applying various valuation methods to assess the property's value more precisely. One of the most common techniques used is the Comparable Sales Method, where the appraiser examines the prices of similar properties that are currently for sale or have recently sold in your neighbourhood or municipality. This provides a benchmark for estimating your property’s value.
In most cases, the appraiser will use more than one valuation method to cross-check and validate the results. This approach ensures a more accurate and reliable assessment of the property’s market value, accounting for different factors that might influence the final valuation.
3. Delivery of the report and results
Once the analysis is complete, the appraiser prepares and delivers a detailed report to their client. This comprehensive document includes key information such as:
- The property details
- The purpose of the valuation
- The date of the appraisal
You can review this document to ensure you're asking for a fair price when selling your home or confirm that the price you’re paying for your new property is reasonable.
In either case, the appraiser’s report serves as a valuable tool, showing that the price is in line with current market conditions.
What is the cost of having a house appraised?
For a single-family home, the average cost of an appraisal is around $650. However, as mentioned earlier, several factors can influence this price, either raising or lowering the fee.
Here are approximate rates for different types of properties:
- $500 - $900 for a house
- $400 - $750 for a condo
- Over $1,000 for a multi-unit property
To get an accurate estimate of current market rates for your property, it's a good idea to contact several certified appraisers in your area to compare their prices and services.
Feel free to reach out to us for assistance. Our team can connect you with 3 prequalified appraisers, allowing you to compare their quotes and choose the one that best suits your needs.
What factors influence appraisal fees?
There are no fixed or preset rates set by the OEAQ for the services of a certified appraiser. The cost of a property evaluation can vary depending on several factors, including:
- The type of property being appraised.
- The region where the property is located.
- The professional experience of the appraiser.
- The purpose for which the report is being produced.
It’s also important to note that appraisers do not receive a commission for their work. The market value of the property does not influence their compensation, ensuring that they have no incentive to provide an estimate that is higher or lower than the actual market value. This helps maintain their impartiality and objectivity in the appraisal process.
Who pays the certified appraiser?
Typically, if you hire the appraiser to determine the market value of your home, you will be responsible for covering the appraisal fees. Furthermore, you may be surprised to learn that if your financial institution requires an appraisal for a mortgage loan or refinancing, you, as the property owner, will still be responsible for covering the costs associated with the appraisal.
Why rely on a certified appraiser for market value evaluation?
When determining the market value of a property, it might be tempted to rely solely on the municipal assessment. However, this is not a reliable shortcut.
Municipal assessments are conducted only every 3 years by the municipality and are mainly used to calculate property taxes. Additionally, there is often a one-and-a-half-year delay between when the value is determined and when the new assessment rolls out.
Moreover, municipal assessments do not reflect current real estate market conditions, and do not represent the true market value of a property. As such, they should not be used to set the sale or purchase price of a home.
This is why it’s highly advisable to rely on the services of a certified appraiser:
- For sellers: an appraisal ensures you set a fair and accurate asking price for your home, aligning with the current market.
- For buyers: it helps confirm that the asking price is reasonable and reflects the current market realities.
How to choose a good certified appraiser?
With many qualified experts available across the province, selecting the right appraiser can be challenging. To ensure you choose a reputable and skilled professional, consider the following tips:
- Compare multiple quotes: get quotes from several appraiser to assess pricing and services.
- Verify their qualifications: ensure they have the necessary credentials for the job.
- Check experience: confirm they have expertise for your specific property type.
- Confirm OEAQ membership: ensure they are registered with the Ordre des évaluateurs agréés du Québec.
- Check insurance: make sure they have civil liability insurance for protection against errors or omissions.
For a rigorous and accurate estimate of your property’s value, it’s highly recommended to consult an OEAQ-certified appraiser. While hiring a certified professional comes with a cost, the investment is well worth it for the reliability, precision, and professionalism they bring to the appraisal process.
What is the Ordre des évaluateurs agréés du Québec (OEAQ)?
The Ordre des évaluateurs agréés du Québec (OEAQ) is the official regulatory body for the appraisal profession in Québec. Empowered by the Professional Code, the OEAQ has exclusive authority over property appraisals, ensuring that public interests are protected and that its members adhere to high standards of quality.
In addition to regulating the profession, the OEAQ enforces a strict code of ethics and practice standards, ensuring certified appraisers perform their work with professionalism and integrity.
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