The Homebuyers Guide to Assessments and Appraisals in Victoria

Buying a home is an exciting process as it symbolizes a new beginning. From viewing different properties to waiting in nervous anticipation for your offer to be accepted, the process can also be draining.

Many people forget the importance of appraisals and assessments—two integral factors when moving home and securing a mortgage. While property assessments define the taxes you’ll pay, appraisals ensure you’re getting a fair deal and can simplify the mortgage application process.

In our homebuyers guide to assessments and appraisals, we’ll cover everything you need to know about the two, including:

The key differences between property assessments and appraisals.
How house appraisals work and the different types available.
How home assessments work and key home assessment dates.
The benefits of home assessments.

What’s The Difference Between an Assessment and Appraisal?

Property appraisals and assessments are essential for prospective homebuyers, ensuring you know how much you’ll spend. Let’s explore the key characteristics of both:

Home Assessments

The Provincial government performs property assessments to assess how much tax homeowners need to pay. These taxes fund vital services, including public schools, police, maintenance of public roads, and other expenses that local authorities have to pay.

A professional will assess your property’s size, condition, location and how it compares to other properties in the area. Homeowners with large properties in affluent areas often pay higher taxes than those in low-income areas.

Home Appraisals

Appraisals also examine a property’s value, but they are not for tax purposes. Prospective buyers might hire a professional appraiser to determine the real market value of a property, ensuring complete clarity.

If you’re applying for a mortgage, the provider might also want you to get an appraisal to determine whether the property is worth the price. The professional appraiser will evaluate the property’s condition and location and compare their findings against those of other properties in the area.

How Does A House Appraisal Work?

According to Canada Newswire, over 30% of property owners in Canada regret agreeing to their mortgages due to high rates and financial difficulties. House appraisals can ensure you get a better mortgage deal and don’t overpay for a property, making them a wise investment. Remember – mortgage brokers have access to a wide variety of lending products, and can get you the best mortgage rates available.

Here’s what you can expect during the house appraisal.

1: The appraiser first visits the property

When you book an appraisal, the professional will visit the property and assess it. They’ll examine the exterior and interior, looking at the location, curb appeal, whether it has a parking space and other vital factors outside, then look at the interior.

Your appraiser will consider the number of rooms, decor, and unique features. Structural integrity and the property’s condition are also important, as even minor issues can decrease its value.

2: The appraiser will research the competition

After assessing the property, the appraiser will look at comparable properties (comps) to get an idea of how much they sold for. They’ll also consider the condition of each property, its advertised market value, and other information to form a basis for your valuation.

However, the value generated from these appraisals is an estimate only, as your property’s condition is a defining factor.

3: The appraiser provides a full appraisal report of the house and property

Once the appraiser has all the information they need, they’ll create a report that details the property’s market value based on the above factors. The information from these reports can help prospective buyers secure better mortgage rates or make a lower offer.

Appraisals can also help sellers and real estate agencies price the property, increasing enquiries and offers.

Different Types of Home Appraisals

With a full appraisal, the professional personally visits the property and performs a full inspection. However, if the seller doesn’t agree to a visit or you’d prefer a more affordable option, alternatives are available, including drive-by, hybrid and desktop appraisals.

Each has its benefits, and the best solution for your needs depends on your reasons for the appraisal.

Drive-By Appraisal

Drive-by appraisals are visual assessments of a property without the professional going inside the home. They’re beneficial when your lender knows the home is in a low-crime area and is confident about its value.

For example, newly constructed homes are less likely to have structural issues or other damage that might impact their value. Ordering a drive-by appraisal is often more cost-effective but less thorough than a full appraisal.

Desktop Appraisal

Technology makes it easier to source details on a property, including its previous value, past selling prices, and other important information. You can often ask for a desktop appraisal, which uses available information to generate a valuation.

The specialist will look at other properties in the area and compare them with the home you’re buying, ensuring a realistic market value.

Hybrid Appraisal

Hybrid appraisals typically combine elements of desktop and drive-by appraisals, giving you and the mortgage lender more clarity about the property’s value.

For example, they might drive to the property for a visual inspection but also perform research to understand how comps are selling in the area. These appraisals are ideal if you want to save money but would prefer a thorough inspection that offers a realistic valuation.

What is a Home Assessment in BC?

Unlike home appraisals, assessments are primarily used by local authorities to determine the tax you’ll pay. As confirmed by BC Assessment, properties within the British Columbia province are assessed based on their market value and the likely price they’d sell for.

The assessment calculates a tax amount based on the age of your home, its condition, and its location.

Information is collected

An accurate home assessment relies on in-depth information about the property, area and other key factors. People with properties in more affluent areas often pay higher taxes – as do those living in period homes.

The assessor will collect information on the home, enabling them to assess what it could be worth.

Information is analyzed

The BCAA then performs an in-depth analysis of the information they gather, evaluating the property market for changes and looking at trends. The process ensures they’ll provide an accurate valuation, which makes it easier to manage taxes.

Assessment notices are delivered

Once the valuation is complete, homeowners receive an assessment notice detailing how much tax they’ll pay over the year. If you’re unhappy with the decision or feel the tax amounts are too high, you can appeal and ask the BCAA to reconsider its position.

Home Assessment Key Dates

If you’re new to home assessments in British Columbia, getting to grips with the key dates can be challenging. Whether you want to ask for a review or stay up to date with the assessment process, these are the dates you should be aware of.

January 31: Property Assessment Review Panel Deadline

Property owners can submit a review request to the BC Assessment panel if they believe their assessment is inaccurate. Failing to submit your request by January 31 will likely result in the case not being heard.

July 1 – Valuation Date

July 1 is BC’s tax-roll date and is the reference point for assessing properties each year. If your property’s value decreases or other significant changes occur after this date, they won’t be factored in until the following year.

October 31 – Physical Condition and Permitted Use

The BCAA also requests that property owners update them on any changes to the property’s condition or usage by October 31. If the condition deteriorates or the property is not in use, its value can decrease.

December 31 – Assessment Notices

The BCAA sends assessment notices to homeowners and realtors, letting them know the tax breakdown for the next year. Once you receive your notice, you’ll have one month to request a review.

How a Home Appraisal Helps With Buying Your Home

Home appraisals are an investment, but they also offer clarity and can help you decide whether to buy a home. Here’s how a home appraisal can support you during the decision-making process:

Fair Market Value: Nobody wants to overpay for a home, and appraisals tell you what the property is worth.
Negotiations: Appraisals prove a home’s value, making it easier for prospective buyers to negotiate the right price.
Mortgage Opportunities: Lenders want security and peace of mind that the property is a wise investment. Providing an appraisal could help you access better rates.
Warning Signs: An in-depth appraisal can also flag issues related to the property, including whether it has any structural damage and if other homes in the area sell well.
Confidence: Buying a home is a huge decision; jumping into it could mean spending more money. The appraisal will give you peace of mind that you’re making the right choice.

The Benefits of Home Assessments For Homebuyers:

Clarity: Knowing how much a property is worth can help you decide whether to buy it or look for something with a higher market value.
Understanding: Home assessments will also look at the surrounding properties in a neighbourhood, enabling prospective buyers to see if the area suits their needs.
Budgeting: All homeowners must pay taxes to their local authorities, and understanding how much you’ll spend will help you budget for ongoing expenses.
Decision-Making: Many people buy properties as investments, and an assessment can help you decide whether the property you’re looking at is a good investment.

Book A Consultation With A Top Victoria BC Mortgage Broker

Going into the home buying process with complete clarity means you’ll know what you’ll spend and whether your property has the potential to increase in value.

However, before considering assessments and appraisals, it’s important to know whether you’re eligible for a mortgage.

If you’d like to discover your eligibility and get access to the best mortgage deals, working with a top Victoria, BC, mortgage broker is a wise decision. Prime Mortgage Works has access to a network of specialist lenders, and we help people from all backgrounds diversify their mortgage options.

Please feel free to get started with your application today or contact us with any questions.