How Assessments and Appraisals Differ

 Sometimes homeowners are genuinely surprised by the variation in the values attributed to their house or condo. Part of the reason for this confusion is the source and type of the value report. A property assessment by your municipality is likely undertaken to determine rates for taxation, or to identify areas requiring infrastructure or services. In such cases, where properties are primarily identified in general terms, such as by neighbourhood or by building type, it is unlikely the assessment would be an accurate representation of the current market value of your property. Alternatively, a bank’s property appraisal tends to be closer to a home’s market value, because a money lender needs reassurance that losses could be recovered in the event of a mortgage default. Still, such appraisals tend to be conservative, as mortgage holders are not in the business of speculation. By contrast, a market value assessment by a competent real estate professional is much more likely to identify a home’s true value, as it will take into account the property’s attributes, previous market activity, and current market demand.