If you are a home owner, you should have received your 2017 Property Tax Bill by now. The number likely fluctuated, but remember that the Property Tax Assessment is done for the purposes of tax collection, not determining market value. Market value is what one is willing to sell a house for, and one is willing to pay, which is what most of us are concerned with.  

The assessed value of the property was determined in July of 2016, over six months ago, and is based on a formula and calculations; someone did not go to every property in the city and complete a full appraisal using the sales values of comparable properties, and the market may have changed for good or for bad, over the last six months.   

There’s rarely a correlation between assessed value and sale price. Some properties will sell for below the assessed value, others above. If the sale price is in the ballpark of the assessed value, be assured there is no direct correlation.  

So how do I find out what is my home worth? 

Some say that a house is worth what someone is willing to pay for it, and while that may be true it is not always that simple. When it comes to the financing, a lender will view the value as the lesser of the purchase price and the market value. Meaning a lender will not recognize the perceived equity if being purchased for a bargain, nor will they be interested in financing above market value, even if a buyer is willing to ‘overpay’.   

Determining a home’s value is rarely a do-it-yourself project: 

  • Do not rely on the Property Tax Assessment 
  • Do not rely on what you paid for the property and add X dollars or X percent for the years you’ve owned it 
  • Do not rely on your neighbours’, friends or family members’ opinions 
  • Do not rely on what you see people listing their homes for on MLS 
  • Do consider a market evaluation by an experienced, active, local Realtor or two, and/or 
  • Do consider asking your mortgage broker to order a market appraisal from a licensed Appraiser

Getting professional opinions from Realtors and Appraisers is an excellent way to get an understanding of the value of your property. Realtors will typically offer a Comparative Market Analysis (CMA) free of charge.  A CMA should include properties currently on the market (your competition if you list), pending sales (the best determinants of what value the market will support), recent sales, and expired or withdrawn listings. Appraisers are licensed and are typically involved later in the purchasing process and there is a cost for their services.

The appraiser does an in-depth, in-person valuation of the property. If it’s been ordered by the lender, the purpose is to determine whether the selling price is justified or not – this is the lender’s way of guarding against fraud or misrepresentation. If the appraisal was ordered by your mortgage broker, you will typically have access to the valuation. If the mortgage was ordered by the insurer or lender, you will not have access to the valuation.    

If you would like to find out the value of your home, contact me, we can discuss your situation, your options, and I can put you in touch with a great realtor.