What is Market Value
An appraisal is an estimate of value, usually in terms of dollars. There are different types of value that can be estimated, such as Insurance Value, Replacement Cost Value, and Rental Value, among others. The type of value most often required by mortgage lenders, buyers, and sellers is Market Value.
The Appraisal Institute of Canada has a very specific definition of Market Value. In layman's terms, it is the price an informed buyer and informed seller would agree upon in an open market with no unusual time, personal, or economic pressure on either of them.
How Do You Value My Residential Property?
An Appraiser can value your home using three methods.
Comparative Sales Approach
The Appraiser must use at least one of the above methods to value a property, and is also required to inform the client if any of the three methods is omitted, and why it is omitted.
How do renovations affect value?
Renovations are vital if you want to maintain your home's value. But don't expect a dollar for dollar return on your investment. Think of renovations as helping to reduce loss due to depreciation rather than adding value.
Some renovations do, however, have a bigger payback in maintaining value than others. A detailed interactive estimate can be made using the Renova interface at https://www.aicanada.ca/e/index.cfm .
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