Your house has a value. Your apartment has a value. Every real estate property has a value. Assessing the value of a home is a task that requires a complete inventory of different factors. Experts generally talk about evaluating the fair market value of real estate. Let’s take a closer look at these seemingly incomprehensible concepts.
Evaluating real estate is more involved than meets the eye. An appraisal is based on quantitative measures (square footage, number of rooms) as well as qualitative criteria (geographical location, sunshine, nuisance...). These factors come into play when evaluating the property itself as well as the environment, for example the proximity to facilities, transportation, shops, schools. More information on appraising a home.
You may want to appraise your house or apartment before selling it. Assessing the value of real estate may also be needed to structure family finances and operations (transfer of a gift, division of assets, inheritance, divorce...). It is also recommended in some cases to obtain a mortgage loan or to optimize taxes related to your real estate holdings.
The expression is widely used but not always understood. The market value is simply the resale value of real estate, meaning the fair market price at which real estate would be bought or sold under normal market conditions. Learn more on assessing fair market value of real estate
« Liquidation value is the presumed value that real estate would have in the case of a forced sale in the context of legal action, after a foreclosure for example, or for failure to repay loans or condominium fees. The forced liquidation value, or what we call auction value, is generally much lower than the fair market value. A real estate expert is often asked by banks to determine the liquidation value so they can determine their true risks before offering a mortgage loan.
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The real estate appraisal that you need |
Appraisal of the fair market real estate value |
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The goal of a real estate appraisal of the fair market value is to determine the value of the property on the market; it corresponds to the fair price at which it could be bought or sold under normal conditions of a free market. |
