Questions About Appraisals During COVID-19

If you're looking to put a plan together that involves mortgage financing, the best place to start is to contact me directly. I would love to work with you!

Here a few questions that you may be wondering about appraisals and some general answers:

Rest assured that to prevent the spread of COVID-19, it is possible to have an appraisal completed without anyone coming into your personal space to view and assess the property.

Instead, the appraiser will use information from past MLS data, municipal permits, property assessment information, as well as information provided by the client or owner to find the property's value.

Be aware that as the provincial government starts reopening and loosening regulations around physical distancing and self-isolation, this may change.

As the appraiser won't be able to assess the property physically, you maybe asked to provide some interior photos of each room. Your pictures will then be included in the report in place of photos that the appraiser would have typically taken themselves.

Alternatively, if you're a little more tech-savvy, consider a video tour of your property carried out by a Zoom Call, FaceTime, WhatsApp, or Marco Polo.

The entire real estate industry is taking Public Health Authority guidelines and advice seriously and is working together to help stop the spread of COVID-19. This includes adapting the way business is done and accepting that alternatives to the ordinary course of business may be required.

At this time almost all lenders are accepting property valuations from accredited appraisers even if the property hasn't been physically inspected. 

An appraiser's job is to assess the property to establish a fair market lending value so that a lender can confidently provide mortgage financing while protecting their investment.  The point of an appraisal is making sure there is sufficient equity in the property in the unlikely event of a mortgage default.

Establishing property value includes scrutinizing recent comparable sales of other properties that are similar in size and quality to the subject property.  

As MLS data will undoubtedly show a significant drop in sales activity during this COVID-19 period, it might be a bit harder for appraisers to find "comparable properties" from recent sales to use in assessing another property's value.  To combat this challenge, I expect lenders to become a bit more flexible with appraisal guidelines and this has already happened with one of my favourite lenders.

No one has a crystal ball, but if the values of the properties that do sell remain steady, then one may logically assume that appraised values will remain stable as well. 

If you have any more questions, please contact me directly as I'd really like to talk with you!  Cheers, Victor