Humber Real Estate - Course 2, Module 11, Property Value and Listing Price Considerations

Humber Real Estate - Course 2, Module 11, Property Value and Listing Price Considerations Comparative Market Analysis - What does CMA stand for? - The Appraisal Institute of Canada (AIC) - The Canadian National Association of Real Estate Appraisers - What are the 2 organizations that designate appraisers in Canada? Canadian Residential Appraiser (CRA): - Qualified to undertake any valuation and consulting assignment on dwellings containing not more than 4 self-contained family housing units or on residential dwelling sites. Accredited Appraiser Canadian Institute (AACI): - Qualified to undertake any valuation and consulting assignment on residential, commercial, industrial, institutional, agricultural, land and special use property types. - The Appraisal Institute of Canada (AIC) offers 2 designations for appraisers. What are they called and what are they qualified to do? Designated Appraiser Residential (DAR): - Qualifies to perform appraisal and consultation assignments of residential property types consisting of not more than 4 housing units and non-complex commercial properties with a residential component. Designated Appraiser Commercial (DAC) - Qualified to provide valuations on all real property types, including residential properties. Certified Appraisal Reviewer: - Are DAR or DAC designated members who have achieved a higher level of training and certification in appraisal review. They are qualified to author either field or technical appraisal review reports on all types of appraisal reports. - The Canadian National Association of Real Estate Appraisers (CNAREA) is a not-for-profit, independent association and offers 3 designations for appraisers. What are they called and what are they qualified to do? - Form report (Short form, usually used for financial institutions, relocation companies and government agencies) - Narrative report (More detailed and could be several pages long) - In what forms are appraisals typically provided? - Appraisal summary - Letter of transmittal - Title page - Table of contents - Taxes and assessment - Area & neighbourhood analysis - Site and improvement analysis - Approaches to value - Reconciliation (how value estimate was determined) - Limiting conditions - Exhibits (maps, diagrams, floor plans) - What does a narrative appraisal report consist of? Yes. - A potential seller has recently inherited a residential property and wishes to know how much it's worth for tax purposes. Should you refer the seller to a designated appraiser? No. You should refer them to a mortgage broker and the lender may ultimately hire a designated appraiser to establish the value of the property. - A seller would like to refinance his home prior to listing. Should you refer the seller to a designated appraiser? A. Do I have the appropriate education and/or the experience to provide an opinion of value or advice about the value of the subject property for the purpose requested? B. Do I have errors and omissions insurance that will cover the type of appraisal being requested? You should tell the seller that you do not have the education/experience or the insurance coverage to complete the opinion of value requested. The solution may be to refer them to a CRA or AACI. - If you receive a request from a seller asking for a signed, written appraisal report on the value of their property, ask the seller why they need it. Before you complete any type of appraisal, written or verbal, what 2 questions should you ask yourself? Opinion of value - The Comparative Market Analysis (CMA) is not a formal appraisal but an _________ _____ _________ of a property. Homes currently for sale, have recently sold or did not sell in a defined time period. - What does a CMA form include? Through the local listing service or can be purchased through an independent third party. - Where can you get a CMA form? The municipality - Where can you find information for a CMA such as lot size, dimensions, builder's floor plan, living space, etc.? Time adjustment - When gathering information for a CMA, you may need to adjust the price a comparable house sold for to the price it would sell for in the current market. This will require making a _________ _________. - If sold recently, no time adjustment is made. - If sold 6 months ago, and prices of housing have increased since then by x per cent, then an x per cent adjustment will be made. - When preparing a CMA of comparable sold listings, how do you make a time adjustment? - If sold house is in the general location of the subject property, no adjustment is made.