Tag Archives: assessed value

Preparing for a House Appraisal

How to Get a Home Ready for an Appraisal

Whether you are selling, purchasing or refinancing a home, the lender’s appraiser has the final word on how much money the home is worth. Therefore, the appraisal can make or break the real estate transaction. Unlike a home inspection, where the inspector determines any existing mechanical or system problems in the house, the appraiser’s job is to compare your house against comparable homes that have recently sold to determine its market value. Some items on the appraisers list you can’t change, such as location, but others, such as condition and updating, depending on your budget, may be appropriate tasks to perform to prepare your house for an appraisal.

 

Cleaning and Organizing

While these may not be the most desirable tasks, cleaning, organizing and removing clutter from your house are among the best ways to prepare for an appraisal. A clean home looks well-maintained – something the appraiser will be looking for. Organizing the garage, closets and cupboards helps them appear larger, which is a great way to add value. Finally, removing excess clutter from your house, such as items on counter tops, makes a room appear both larger and cleaner.

Whether you are selling, purchasing or refinancing a home, the lender’s appraiser has the final word on how much money the home is worth. Therefore, the appraisal can make or break the real estate transaction. Unlike a home inspection, where the inspector determines any existing mechanical or system problems in the house, the appraiser’s job is to compare your house against comparable homes that have recently sold to determine its market value. Some items on the appraisers list you can’t change, such as location, but others, such as condition and updating, depending on your budget, may be appropriate tasks to perform to prepare your house for an appraisal.

Curb Appeal

Check out how your home stacks up against those that have recently sold in the area insofar as its exterior appeal, also known as curb appeal. The outside of your house makes a first impression on the appraiser, so make it is as clean and de-cluttered as the interior. Tidy up the landscaping and spread some fresh mulch in the landscape beds. Remove any toys or other clutter from the front yard. A well-maintained yard gives the impression of a well-maintained home.

Whether you are selling, purchasing or refinancing a home, the lender’s appraiser has the final word on how much money the home is worth. Therefore, the appraisal can make or break the real estate transaction. Unlike a home inspection, where the inspector determines any existing mechanical or system problems in the house, the appraiser’s job is to compare your house against comparable homes that have recently sold to determine its market value. Some items on the appraisers list you can’t change, such as location, but others, such as condition and updating, depending on your budget, may be appropriate tasks to perform to prepare your house for an appraisal.

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Make Necessary Updates

Fresh paint is an easy and inexpensive way to add value to your house. This is especially necessary if you have wild or unusual wall colors, advises Loreen Stuhr, an appraiser with Appraisers of Las Vegas. She recommends painting the walls in neutral colors and replacing vinyl flooring with wood, laminate or tile. If it’s in your budget to do so, consider replacing laminate counter tops with tile, granite or other more upscale materials.

Whether you are selling, purchasing or refinancing a home, the lender’s appraiser has the final word on how much money the home is worth. Therefore, the appraisal can make or break the real estate transaction. Unlike a home inspection, where the inspector determines any existing mechanical or system problems in the house, the appraiser’s job is to compare your house against comparable homes that have recently sold to determine its market value. Some items on the appraisers list you can’t change, such as location, but others, such as condition and updating, depending on your budget, may be appropriate tasks to perform to prepare your house for an appraisal.

Repairs

Fix any maintenance issues that the appraiser is sure to notice, such as leaking or dripping faucets, running toilets, torn screens, missing trim and missing or wobbly stairway handrails. If the home buyer is using a loan backed by the Federal Housing Administration (FHA) to purchase the house, keep in mind that FHA requires that the seller repair anything that affects the health and safety of the occupants. An FHA-approved appraiser is required to make note of such property conditions, including an assumption of the structural integrity of the property. Items that require repair before the close of escrow include providing adequate access and exit from the bedrooms to outside the home, leaky roofs, foundation damage and flaking lead paint.

Whether you are selling, purchasing or refinancing a home, the lender’s appraiser has the final word on how much money the home is worth. Therefore, the appraisal can make or break the real estate transaction. Unlike a home inspection, where the inspector determines any existing mechanical or system problems in the house, the appraiser’s job is to compare your house against comparable homes that have recently sold to determine its market value. Some items on the appraisers list you can’t change, such as location, but others, such as condition and updating, depending on your budget, may be appropriate tasks to perform to prepare your house for an appraisal.

Paperwork

Although the appraiser has numerous ways of finding information, she may have no way to know about improvements you’ve made to the home, which could have a positive impact on its value. A good way to let her know is to create a list of the home’s features and benefits, advises David Hesidenz of David Hesidenz Appraisals in Pennsylvania. Hesidenz suggests that you supply the appraiser with a page or two containing the exact street address of your home, the number of bedrooms and bathrooms and the square footage and lot size. Then make a list of any improvements you’ve made to the home and the date they were finished. Some of these improvements may include a new roof, new windows, upgraded plumbing or electrical work, and room additions.

Source: PocketSense.com – Bridget Kelly

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Everything you need to know about your MPAC assessment and property taxes

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When people are trying to figure out whether they can afford a home, they’ll typically focus on the numbers of their down payment and mortgage. While this instinct is understandable — these factors, after all, account for the bulk of home ownership costs — paying down the actual price of your home isn’t all there is to it. Depending on what you own, homeownership costs can also span utilities, condo fees, maintenance fees, and insurance.

No matter what kind of property you have, though, you’ll have to pay property taxes.

What are property taxes, and how do they work? A property tax is a fee that property owners are charged by their local government, based on the value of their property. The tax is usually a percentage of the property’s value, and the exact percentage that a government will charge will vary depending on the municipality you live in. But how does the government determine how much your property is worth?

The answer, if you live in Ontario, is MPAC. The not-for-profit organization works with the province to assess every property in Ontario, and report their dollar value to the municipalities they belong to. Each local government will then use those numbers to set the price of your property tax.

MPAC updates its property assessments across the province once every four years, and the next update is scheduled for 2020. To help you understand how the process works and how it impacts you, we asked Greg Baxter, director of valuation and customer relations at MPAC, to break it down.

What is an MPAC assessment?

Simply put, an assessment is the process that MPAC uses to figure out how much money your property is worth. Your local government will then determine how much you owe in property taxes, based on this value.

“We are responsible for assessing and classifying all properties in Ontario,” Baxter explains. “There are more than five million properties in Ontario — and that represents about $2.78 trillion in property value.”

In Ontario, MPAC will update the value of properties across the province every four years — the last few updates were made in 2012, 2016, and the next one is scheduled for 2020.

The property values that MPAC reports during each update help determine how much property tax you’ll pay over the next four years. For example, if MPAC decided that the value of your home was $500,000 in 2012, the government calculated your property taxes based on a $500,000 value between 2013 and 2016, when MPAC made its next assessment update. The 2016 assessment was then applied between 2017 and 2020.

There are exceptions, though. MPAC continues to review properties between officially-scheduled updates to account for big changes like new structures being built, buildings being demolished, and properties changing uses. When this kind of change happens, MPAC will give you a new assessment for your next tax year.

And what happens if the value of your home changes between one scheduled assessment period and the next? Do you immediately get hit with a higher — or lower — assessment?

To protect homeowners from sudden increases in their property taxes, the Ontario government uses what it calls a “phase-in program.” Let’s say that the value of your home increased dramatically between 2012 and 2016, because you live in an expensive city (ahem, Toronto). Instead of immediately asking you to pay property taxes based on this new value, the value is gradually phased in between 2017 and 2020 until it reaches the full assessed value, so you have time to adjust.

On the other hand, if MPAC discovers that the value of your home decreased, no “phasing” is necessary: the assessed value of your home will immediately drop — along with (probably) the amount of property tax you’re paying.

It’s important to understand that changes in your property’s assessed value will not always lead to changes in how much you pay in property taxes. “If the assessed value of a home has increased by the same percentage as the average in the municipality, there may not be an increase in the property taxes paid by a property owner,” Baxter explains. “Contact your local municipality or taxing authority if you have questions about your property tax.”

How does MPAC determine the value of my property?

Essentially, it all boils down to sales data from Teranet, which runs Ontario’s land registration system.

“We look at sales — property sales transactions that occur between a willing buyer and a willing seller,” says Baxter. “By analyzing the sales and by analyzing the data that we have on those properties, we’re able to arrive at the current value assessment.”

The value that MPAC gives to your property every four years is what MPAC believes your property would have sold for on a given “valuation date.” The most recent valuation dates have been Jan. 1, 2012, Jan. 1, 2016, and Jan. 1, 2019. That means if MPAC assessed the value of your property to be $1 million on Jan. 1, 2012, the next four tax years — 2013 through 2016 — saw your property taxes calculated based on a $1 million home value.

While valuation dates have typically happened in the same year as assessment updates (see 2012 and 2016), recent legislative changes made it necessary for MPAC to set its latest valuation date a full year ahead of the upcoming assessment update in 2020 — the valuation date for the 2021 through 2024 tax period was on Jan. 1, 2019.

But how does the housing market itself come up with prices? “For residential purposes, there’s about five main factors that account for roughly 85% of the value of a property,” Baxter explains. These include:

  • The age of the property
  • The size of the home structure
  • The location of the property
  • The size of the lot
  • The quality of construction

Earlier, we mentioned that MPAC continues to review major property changes — like new structures being built or demolished — in between official assessment updates. When MPAC calculates a new value for your property after a big change, that new value will still be based on the last set valuation period.

If you’re confused, consider this example: let’s say your property was assessed at $500,000 on Jan. 1, 2012, so your property taxes would be calculated based on a $500,000 property value between 2013 and 2016. In 2014, however, right in the middle of that tax period, you demolished your home but still owned the property — which is now an empty lot. MPAC will reassess the value of your home for the 2015 tax year based on this change, by estimating what the current state of your property — an empty lot — would have sold for on Jan. 1, 2012.

How can you prepare for your assessment?

“Really, property owners are not required to do anything to prepare for an assessment,” says Baxter. “We complete a province wide assessment update every four years, based on the legislative valuation date. And then we mail to property owners a property assessment notice.”

Again, the next assessment update is schedule for 2020, and will apply to the tax years between 2021 and 2024.

To review the information that MPAC has on your home, Baxter advises homeowners to visit aboutmyproperty.ca. If any of the information is incorrect, you should contact MPAC to have it updated.

Baxter encourages all property owners to visit the site, which also allows them to compare their property to properties within their area. In general, it also helps homeowners “gain clarity on the information that we have on their file related to their property.”

Will a new MPAC assessment affect my home insurance rate?

Given that your home insurance rate is partly determined by how much it would cost to fix your home in the case of an emergency, the question is worth asking.

Turns out, it doesn’t affect your rate at all.

“The assessed property value for taxation is not material for property insurance,” confirmed Vanessa Barrasa at the Insurance Bureau of Canada.

Source: Lowestrate.ca – By: Jessica Mach on January 15, 2019

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