I see real estate salespeople offering a service called a Market Evaluation or Comparative Market Analysis. What is the difference between this and an Appraisal?
Whether you are in the market to buy or sell, it is important to have a good understanding of the service options and insights available to you as you prepare for your next move.
Adopting an active “buyer”, or “seller”, attitude from the outset will serve you well throughout the process. I strongly suggest you take some time to educate yourself prior to starting your search for a salesperson or brokerage to assist you with the sale or purchase of a home. This will help point you in the right direction when it comes to what discussions you will want to have with a potential representative.
A big piece of the puzzle is knowing which tools a representative is offering when it comes to representing your best interests and addressing your lifestyle goals, concerns and/or any sensitivities you may have.
To your question above, Appraisals and Evaluations/Analysis are two very distinct services that some salespersons or brokerages bring to the table. It is important to know and understand the differences between the two in order to get the most from the insights they offer. I would like to highlight that neither is required in the sale or purchase of a property.
When discussing an Evaluation or Market Analysis, you can expect a cross comparison of similar sold, active and expired listing properties within a specified area. Without recognition of specific renovations and upgrades, or major repairs required that impact a sale. This can give you a good idea of the general make-up of a neighbourhood and provide a baseline comparison of the properties in it. Keep in mind, just because two or more properties may be similar in size and have the same number of bedrooms and washrooms, this does not always mean you’re looking at an apple to apple comparison. For this reason, when reviewing a report, you may want to dig deeper into any anomalies that seem to skew the overall picture. These reports are valuable for both buyers and sellers. Buyers by helping them to determine what they will pay for a property and sellers by assisting them in setting a realistic asking price that reflects the immediate market.
A Real Estate Appraisal, on the other hand, will provide information related to features and the condition of a specific address. Factors in an Appraisal Report such as the square footage of the structure, its overall condition, the number of bathrooms and bedrooms and such things as an inclusion of a pool or fireplace, will provide an assessment for financial lenders and may serve as an additional tool for potential buyers regarding a property’s value. It is important to note that an appraisal can only be prepared by someone who is accredited to prepare one.
Best of luck to you on your next real estate transaction. For more information and tips on buying and selling visit www.reco.on.ca
If you have a question for Joe about the home buying or selling process, please email email@example.com.
Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.