Questions About Appraisals During COVID-19

Bill Fraser • Apr 29, 2020

If you're looking to purchase or refinance a property while most of Canada is self-isolating to stop the spread of COVID-19, you probably have some questions around how the pandemic is impacting appraisals.


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!


However, here a few questions that you may be asking about appraisals and some general information.


1. Can I get an appraisal without having someone come into my property?


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 MLS data, municipal permits, and 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 social distancing and self-isolation, this might change.


2. Is there anything I can provide to assist with the appraisal?


As the appraiser won't be able to assess the property physically, consider providing some interior photos. Your pictures could then be included in the report in place of photos that they would typically take 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.


In these times, appraisers are very flexible; it's a good idea to be available, and as helpful as possible.


3. Will the banks accept an appraisal if the property wasn't physically inspected?


As we're living in unprecedented times, the 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, most lenders are accepting property valuation from accredited appraisers, even if the property hasn't been physically inspected. Your team of real estate professionals will be able to provide you with guidance at the appropriate time.


4. Are property values coming in lower because of COVID-19


While this is a tough question to answer, here are the facts.


An appraiser's job is to assess the property to establish a value, so that a lender can confidently provide mortgage financing while protecting their investment, making sure there is sufficient equity in case of default.


Establishing property value includes scrutinizing comparable listings; assessing what has sold, at what price, within a reasonable time frame. While also considering how long that property sat on the market.


In the middle of a global pandemic, nothing can be considered normal.


Unfortunately, as we're living through a time of uncertainty, pessimism and conservatism will most likely lead to lower appraisal values.


As MLS data will undoubtedly show a significant drop in sales activity during COVID-19, it might be harder for appraisers to find "comparable properties" to use in assessing another property's value. However, if the values of the properties that did sell remain steady, there is cause to believe that appraised values could remain stable as well. Only time will tell.


If you have any more questions, please contact me directly, I'd love to talk with you.


BILL FRASER
OWNER / MORTGAGE EXPERT

BOOK AN APPOINTMENT CONTACT ME
RECENT POSTS

RRSP As A Downpayment

By Bill Fraser • 14 May, 2024
Did you know there’s a program that allows you to use your RRSP to help come up with your downpayment to buy a home? It’s called the Home Buyer’s Plan (or HBP for short), and it’s made possible by the government of Canada. While the program is pretty straightforward, there are a few things you need to know. Your first home (with some exceptions) To qualify, you need to be buying your first home. However, when you look into the fine print, you find that technically, you must not have owned a home in the last four years or have lived in a house that your spouse owned in the previous four years. Another exception is for those with a disability or those helping someone with a disability. In this case, you can withdraw from an RRSP for a home purchase at any time. You have to pay back the RRSP You have 15 years to pay back the RRSP, and you start the second year after the withdrawal. While you won’t pay any tax on this particular withdrawal, it does come with some conditions. You’ll have to pay back the total amount you withdrew over 15 years. The CRA will send you an HBP Statement of Account every year to advise how much you owe the RRSP that year. Your repayments will not count as contributions as you’ve already received the tax break from those funds. Access to funds The funds you withdraw from the RRSP must have been there for at least 90 days. You can still technically withdraw the money from your RRSP and use it for your down-payment, but it won’t be tax-deductible and won’t be part of the HBP. You can access up to $35,000 individually or $70,00 per couple through the HBP. Please connect anytime if you’d like to know more about the HBP and how it could work for you as you plan your downpayment. It would be a pleasure to work with you.

Selling Your Property? Let's Talk

By Bill Fraser • 30 Apr, 2024
If you’ve been thinking about selling your existing property, for whatever reason, it would be in your best interest to connect with an independent mortgage professional before calling your real estate agent or listing it yourself. And while talking with your mortgage professional might not sound like the most logical place to start, here are a few scenarios that explain why it makes the most sense. If you’re buying a new property If you’re selling your property, chances are, you’ll have to move somewhere! So, if you plan on buying a new property using the equity from the sale of your existing property, chances are you’ll need a new mortgage. Don’t assume that just because you’ve secured mortgage financing before, that you’ll qualify again. Mortgage rules are constantly changing; make sure you have a pre-approval in place before you list your property. Also, by connecting with a mortgage professional first, you can look into your existing mortgage terms. You might be able to port your mortgage instead of getting a new one, which could save you some money. If you’re not buying a new property Even if you aren’t buying a new property and want to sell your existing property, it’s still a good idea to connect with a mortgage professional first, as we can look at the cost of breaking your mortgage together. Unless you have an open mortgage, or a line of credit, there will be a penalty to break your mortgage. The goal is to work on a plan to minimize your penalty. Because of how mortgage penalties work, sometimes it’s just a matter of waiting a few months to save thousands. You'll never know unless you take a look at the details. Marital breakdown The simple truth is that marriages break down. When that happens, often, people want closure, and unfortunately, they make decisions without really thinking them through or seeing the full picture. So, instead of simply selling the family home because that feels like the only option, please know that special programs exist that allow one party to buy out the former spouse. The key here is to have a legal separation agreement is in place. If you’d like to discuss the sale of your property and your plans for the future, connect anytime. It would be a pleasure to work with you!
More Posts
Share by: