# Valuation for private sale



## Davis (Nov 11, 2014)

I'm getting to be selling my mother's house in Toronto. A couple of neighbours have expressed interest in doing a private purchase - one of them quite seriously. I'd like to get an independent valuation to use as a staring point for negotiating. I haven't done this before. Any suggestions on where to find someone to do this? How much should I expect to pay? Thanks.


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## scorpion_ca (Nov 3, 2014)

How about the city of Toronto property assessment value?


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## dougboswell (Oct 25, 2010)

You might look here as these are licensed appraisers. http://www.aicanada.ca/find-an-appraiser/ Make sure they have completed the appraisal course and have a designation such as AACI. Nationwide Appraisers Services is an umbrella group but I don't know if an individual can make use of them. If the person offering to buy it is planning on having a mortgage the lender will require an appraisal. In Toronto the cost can vary from $200 to over $300 + GST. Appraisers have started to increase their fee by calling any house in Toronto over $1 million a luxury home and then add a hefty surcharge to their base fee. Do not use a real estate agent to give a value.


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## Davis (Nov 11, 2014)

Scorpion: property tax assessment values are notoriously off the mark from market values. I don't think prospective buyers would go for that, but I will look that up out of interest.

Doug: thanks for that link. I'll checvk it out. Why would you not use a real estate agent? Don't they do that sort of analysis in determining prices to recommend to clients looking to sell or buy?


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## humble_pie (Jun 7, 2009)

in the only similar situation i've known, 2 appraisals were sought & obtained. One was from a well-known realtor with a long history of activity in the neighbourhood. The other was from an appraiser who frequently appraised properties for one of the involved parties, a couple who themselves were experienced RE investors.

it was expected that their appraiser would appraise high, since a high valuation would benefit the couple.

both the realtor & the appraiser produced similar documents. Good descriptions of the subject property, each with 3 recent comparable sales in the neighbourhood (the realtor & the appraiser had one comparable in common plus each had 2 other comparable sales.)

there were even commentaries explaining why the comparables' higher or lower prices were related to this or that difference from the subject property. Altogether both were good jobs & well worth the fees paid.

i'm going on about 2 appraisals because the professional appraiser's fair market value turned out to be almost identical to the realtor's. The RE investor couple had been expecting an appraised value, from their very own appraiser, that would be at least $100k higher than the realtor. But in the end there was only a $5k difference between the 2 prices.

in other words, 2 appraisals would likely be better than one. Davis in your case these would be your own & your neighbour's. Although you might start by thinking that your appraisal would or should be high while your neighbour's would be low, nevertheless the reality might be surprising. As in the above story.


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## humble_pie (Jun 7, 2009)

dougboswell said:


> If the person offering to buy it is planning on having a mortgage the lender will require an appraisal. In Toronto the cost can vary from $200 to over $300 + GST. Appraisers have started to increase their fee by calling any house in Toronto over $1 million a luxury home and then add a hefty surcharge to their base fee. Do not use a real estate agent to give a value.



$200-300 strikes me as a fee that is almost too low these days, if one might dare to speak such heresy. No wonder they are tacking on hefty surcharges for $1M plus homes in toronto.


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## Just a Guy (Mar 27, 2012)

I agree with getting an appraiser to do the job. It costs about $350 or so all in usually. The bank won't recognize these usually and order their own, so the buyer may not want to hire one for negotiations. I find personal appraisals tend to be higher than bank appraisals even when done by the same company (unless you point out that they just appraised the property). 

I wouldn't use the tax assessment at all. 

The cheapest way is to call up a realtor (some will do it without you listing with them) and ask for comparable properties that have recently sold, not listed, in the same or comparable areas. Don't ask his opinion, just get a list of comparables.


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## humble_pie (Jun 7, 2009)

couldn't one more easily get a list of comparables that have recently sold in the district from one's city hall though. In my city, i could.

i just remembered - with some merriment - that i have neighbours who routinely drop in on open houses in the neighbourhood to check out what's for sale & thus keep tabs on comparables for their own houses.

actually (more laughter) nearly all of my neighbours are far, far, far more knowledgeable about what's sold nearby for exactly how many $$ & what actually were the conditions of the various kitchens, bathrooms, closets, basements & other household appurtenances, than i ever will be in my lifetime.

seriously Davis, if you're in toronto yourself & your mother's house is not too far away, perhaps you could visit a couple open houses on the street & nearby. In addition to hiring an appraiser.


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## AltaRed (Jun 8, 2009)

Hiring an accredited appraiser is essential to get a reference point. That is the only one that has credibility with mortgage companies, CRA, etc. By all means, consider having a knowledgeable realtor provide a MVA as well but that is all it is... a Market Value Assessment.


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## Newby1983 (Apr 9, 2015)

I used an appraiser for my private sale. He was a member of the aic and he did a very thorough job. He charged me $275. He was bang-on the sale price. I did consider using an agent and his assessment was $20k lower. I also had a 3rd done by the comfree RE agent and his came in $5k lower. 

It wouldn't hurt getting a second opinion from a RE agent but he/she may be upset to find out they were played. Then again the Toronto market may surprise you (and your appraiser) if you were to list it.


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## spirit (May 9, 2009)

When I was executrix for my father's estate....I wanted to buy my brothers out and have my son buy the property as his first home. Our bank (he banked with them also) sent an appraiser and we used that amount to settle the estate. Of course my brother's asked a realtor to give them an appraisal in case they decided to sell and then my son would just look for another house. By the time we calculated their realtor fee the price was about the same.

My girlfriend sold her mother's house the same way. Her husband is a police officer and that is how many of them sold and bought property. They had a bank appraisal and had no trouble selling the house privately. Not sure if this is the right way but it seemed to work for the both of us. 

Ps, My husband and I used realtors to buy our home and also dispose of his mother's house. So we have used both systems.


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## birdman (Feb 12, 2013)

Years ago I wanted to sell our home by myself and the first thing I did was get an appraisal. I was in the business and hired a very well known and capable appraiser who provided me an appraisal for $250,000. I decided to list it at 280,000. and sold it for $275,000. within a month. I talked to the appraiser who apologized and attributed the variance to the fast moving market(which it was). So, if it were myself, I would talk to 2 realtors and I would also get an appraisal.


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## Davis (Nov 11, 2014)

Very useful posts - thank you everyone.

An appraisal is always going to be an estimate - the only way to determine what the market will pay will be to go to market, but a private sale will be less hassle, and has a 5% advantage to start. It has occurred to us that a real estate agent could well get us more than 5% more through a bidding war, but there is no guarantee there, and we would probably have to get into staging and all of that. 

I am reassured that different people will appraise about the same value. That makes sense to me. 

One thing about people knowing that a woman in her eighties has been living in a house, lots of agents drop by with updates on recent sales in the neighbourhood, and i have been keeping those in a file, so I am aware of the broad price range. the houses in the neighbourhood vary quite a bit in size and layout, so other sales provide only a guideline. Spending $300-400 seems like not very much if it we're selling a house that would be at the upper end of six figures or maybe the lower end of seven. If the appraiser comes back with something much above or below that range, we'd challenge them. I would expect that the prospective buyers would want to get their own appraisal, so there would be the second opinion. I would propose to them that we share the results of our respective appraisals before we start talking about price. 

I really appreciate the advice I've received here. I'll let you know how it goes.


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## Newby1983 (Apr 9, 2015)

Davis said:


> Very useful posts - thank you everyone.
> 
> An appraisal is always going to be an estimate - the only way to determine what the market will pay will be to go to market, but a private sale will be less hassle, and has a 5% advantage to start. It has occurred to us that a real estate agent could well get us more than 5% more through a bidding war, but there is no guarantee there, and we would probably have to get into staging and all of that.
> 
> ...


Good luck. You could also sign up free with tosolds.ca. They've been sending me emails each weekday for the past 2 years and I can see list and sale prices and all information related to a listing that sold the previous day within the GTA and surrounding. Disadvantage is you can't go back to see what a house sold for 2 months ago so you may have to keep notes as you view them each day. I think in any case the more opinions you get (appraiser, RE agent, online) the better you'll get a sense of what it's actually worth.


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## atrp2biz (Sep 22, 2010)

There is also the argument that the sale price should be slightly lower than the appraisal price. The owner's alternative is to hire a listing agent. However, the net proceeds from the sale would be ~95-96% of the sale price (ignoring legal fees, transfer taxes, etc.)--presumably market value. If I were a buyer, I would insist on sharing the benefit of not having an agent and to transact at ~98% of the appraised value.


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## marina628 (Dec 14, 2010)

Sent OP private message on this situation , my friend was in the situation back in June neighbor offered $399,000 ,house basically a tear down in toronto and appraisal came in for similar price.My friend listed it on MLS,got $582,000 for it.Toronto homes are crazy ,if the address is indeed Toronto and not a suburb.My friend is very pleased he didn't go with his private sale.As for appraisals ,they are nowhere reflecting sale prices in Toronto these days.


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## AlMansur (Jan 25, 2016)

I could provide the comparables from TREB, just contact me directly (offline).


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