house appraisal cost | How is the value of a house calculated?

How is the value of a house calculated?





How is the value of a house calculated?
Julie Gaucher is Vice President and Chief Operating Officer of Sutton, Quebec Real Estate Services. She answered questions from Jecomprends.

JC: How is the price of a house evaluated?

JG: The first criterion is the location. Then, we consider issues such as development in the area, if there have been renovations in the kitchen or bathrooms, and if the result respects the trends. Other criteria determine the value of the house. For example, if there are at least three rooms on the same floor, if the house is located near services and schools, if public transit is easily accessible. This last criterion is now important whether you are in the city or in the suburbs.

JC: How does the value of similar properties influence the value of your home?

JG: When determining the value of a home, the real estate broker looks at "comparables". He compares a condo with other condos and a bungalow with other bungalows. Today, we can no longer rely on comparables that are more than six months to a year old, because the market is changing too fast. So we use the recent comparables, usually the sales made six to 12 months ago.

JC: Who is best placed to evaluate a house?

JG: It's the broker because it's his job. He sees several evaluations a day. Every day, he has to do "comparable". In addition, the broker has access to the expertise and tools provided by the company to which he is affiliated. Moreover, we must note that we can no longer rely on the municipal evaluation, which is often too low, because it moves too quickly in the sector.

JC: What happens if the assessment is lower than expected?

JG: The price set by the real estate broker is usually very fair. However, the broker may have difficulty convincing his client. For example, if the mortgage is too high or if the client absolutely needs a specific sum to buy another property. If the customer is not satisfied with the valuation, the broker will try to convince him or refuse to take over the sale of the house. The broker may also agree to display the price requested by the client, but may have to reduce it later, which is not desirable if one does not want to "burn" his property on the market. Of course, it is the customer who makes the final decision.