We heard it on Tuesday, then we heard it again today.
Online it’s even more common. Every 2 weeks, we’ll receive a comment on our listings voicing how a property is incorrectly priced and how they believe it should reflect the municipal evaluation. Every 2 weeks. Municipal evaluation exists ONLY to determine the amount of tax that a property owner must pay.
It is not a credible tool to appraise real market value because:
1) Reference date: assessment roll is updated every 3 years by a general neighbourhood multiplier. IE: Market conditions were observed in July 2017, documented in September 2018, in effect Jan 2019, and are used to calculate property tax for 2019, 2020, 2021.
In other words, today’s low inventory-high demand market does not reflect the mid-2017 environment. The fundamentals have changed entirely; interest rates, level of inventory, wage growth, job creation, demand, unemployment rate, the impact of time/property appreciation, rate of new constructions, cost of building materials, immigration policy, etc. Let’s throw in a global pandemic.
2) Renovations: only taken into consideration if a residential permit was requested (unlikely for aesthetics) and it triggered a municipal appraisal (rare due to staff shortage). The most accurate way to evaluate the true market value is to analyze the comparables within the same macro neighbourhood, up to 6 months back, and to account for time, land and property adjustments on a per property basis.
Every market requires a different pricing strategy approach. Every seller has a different objective and timeline. Tell us your story, and we’ll recommend what’s best for your agenda. Got a different take on property evaluation? We want to hear about it, drop your comments below!