MortgageBroker mbabc.ca winter 2015 | 33
Mortgage brokers regularly work
with professional real estate appraisers to
obtain market values of properties to finance
or refinance their clients' mortgage. is
value is a critical piece of information and
there is a lot at stake in its accuracy – for the
broker, the lender and the consumer.
Obtaining a reliable appraisal that
is unbiased, independent and based on
comprehensive research and analysis is key to
the success of this transaction. Unfortunately,
there are some myths, misconceptions and
misunderstandings about how the appraiser
determines the market value. is article
provides insight and perspective from an
Appraisal Institute of Canada's designated
appraiser's point of view.
Myth: the purchase price of
the property is the same as
the appraised market value.
Reality: e appraised market value
may not be the same as the selling price of the
home – it may be higher or lower. Real estate
markets in some areas can be volatile and are
impacted by the economic conditions of the
market. For example, in a sellers' market, or
when there are multiple offers on a home,
an inflated selling price, above the appraised
market value, can be realized.
Bidding wars may skew the true market
value of the home. A multiple-offer scenario
may be good for the seller, the real estate agent
and the mortgage broker in the short term,
but in the long-term, the purchaser may face
challenges when selling the property in less
active market conditions.
Having an opinion of value that is obtained
through comprehensive research of the market
over time provides the property owner and the
lender with an accurate value. Furthermore,
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residentialappraisals
Myths, Misconceptions
& Misunderstandings
Insight and perspective on how appraisers determine accurate market value
BY Janice o'brien
