In order to make an informed decision when carrying out a real estate project, an evaluation report is an indispensable tool in the decision-making process and in obtaining project financing.

Building project 

An evaluation report of the POTENTIAL market value of the project will inform you, at the beginning of the project, of the estimated market value of your project once completed. The POTENTIAL market value will allow you to know its potential profitability, to justify the costs, and will be essential in obtaining financing from a banking institution or a private lender.

Flip project / Renovations

A valuation report of the CURRENT value of the property (before renovation), as well as a value estimate at the beginning of the project of the POTENTIAL value of the project (renovations considered as completed), will enable you to know its potential profitability, to justify the costs, and will be essential in obtaining financing from a financial institution or a private lender.

Progress of construction work

In new constructions or flip projects, financial institutions will free up the funds required to finance the project according to the progress of the construction work based on pre-established conditions or milestones set by the bank. An independent report on the progress of the work at the various stages of construction will allow you to obtain necessary funds to finance the following steps.

Rent to own

A valuation report of the market value of the property at the time of the transaction allows you to make an informed decision by ensuring that the sale price of the property at the end of the contract is based on a market value estimated by a professional chartered appraiser.

Whether you are a purchaser or a seller, obtaining an independent appraisal of the market value of the property will allow you to bring solid arguments during negotiation and will confirm that the transaction was made at fair market value.

Unlike all the parties involved in the transaction “Purchase/sale process” (bank, real estate broker, mortgage broker), the chartered appraiser is the only one with the skills and ability to produce a value estimate, and the only one to provide you with a market value that is FAIR, INDEPENDENT, UNBIASED and free of any CONFLICT OF INTEREST.

Despite their good will and honesty, the various parties in a transaction are not independent and have a bias because they all have an interest in the transaction.

Here are several situations where a Market Value Appraisal Report is required for tax purposes:

In the case of a sale between related persons. 

When selling a property between related persons, the tax authorities consider that the property was traded at its market value on the date of the transaction. In case of disagreement regarding the market value estimated by the tax authorities, a valuation report of the market value as of the date of the transaction will bring credibility.

Principal residence

The capital gain realized on the sale of a principal residence is tax free. However, in certain circumstances, only a portion of the capital gain is free.

One of these circumstances would be if you were to move into one of your own rental properties. At the time of the sale, only the period of occupancy will be tax free. So in order to know the portion of the capital gain that is tax free in this situation, it is important to get a valuation report of the market value of the property at the date you moved. This also applies when you decide to move out and rent the apartment/condo you occupied. Once again, a valuation report of the market value at the time of the move will determine the portion of the tax-free gain.