by admin

May 14, 2014

Are you being relocated for your job? Why is a relocation appraisal necessary? How is it different than a mortgage financing appraisal?

An appraisal can be completed by one of three appraising methods: the cost approach, by direct comparison, or the income approach. According to Steven Coull, the executive director of the Canadian Association of Real Estate Appraisers, the first two methods are used to value residential homes for appraisals (including relocation appraisals), with an emphasis on the direct comparison approach. The direct comparison approach uses recent sales or active listings in the area, to make adjustments and determine an estimated value for the property.

Now you may be thinking “I just had an appraisal done a couple of months ago when I refinanced my home. Why do I need to have another one done now that I am being transferred?”. To answer this, let’s look at the difference between a relocation appraisal and a mortgage financing appraisal.

Simply put, a relocation appraisal is done in a more detailed appraisal format, often requiring more narrative descriptions as opposed to just ‘ticking the boxes’. A mortgage financing appraisal typically asks the question “What is the fair market value for this home, today?”, whereas the relocation appraisal is written with the question “What will the home likely sell for in the forecasted market, in a reasonable time period?” in mind.

The relocation appraisal has a more comprehensive market analysis than the mortgage financing appraisal, and provides comments on the current market trends in the neighbourhood. It also requires a detailed commentary on the comparable sales and listings used in the appraisal.

WesTech Appraisal Services’ appraisal team has considerable experience in the valuation of property for the purposes of employee relocation. We are very familiar with the minimum requirements for relocation appraisals and can complete your report on a variety of Canadian industry relocation forms. Come check us out or contact us at (604)-986-2722 .

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