Industry Regulation Isn't a Cure-All

  The key issue affecting any real estate transaction is price. Sure a property may be in need of repair or updating, its location is poor or worse it’s been stigmatized by a suicide or perhaps it was a grow house but ultimately these factors are ALL a function of price.
  As an active real estate Broker and Market Value Appraiser (MVA), I endeavour to take as technical an approach to pricing a potential property to list for sale as I can. This approach has served both my seller client(s) and myself effectively and after all our knowledge is a large part of why consumers call us. As REALTORS® we get paid for “results” not “effort” with the ultimate result being a closed sale. If I can’t demonstrate to a potential buyer why my listing is priced where it is, then I shouldn’t have the listing. Sometimes preparing a comparable market analysis is sufficient in arriving at a property’s current market value. On other occasions and this applies particularly to the luxury home market, commercial properties comparable properties simply do not exist so further analysis and calculations may be required. That being said, while all the investigation, analysis and math in the world is good, a property is ultimately worth what a willing buyer(s) is prepared to pay and what the seller(s) is willing to accept. Our role as REALTORS® is to act as a trusted advisor to these parties, providing the necessary facts for them to make informed decisions including that of price.
  Mike Holmes, long an advocate of regulating the home inspection profession recently commented on real estate appraisers in the National Post. One of his readers experienced some difficulty with respect to an appraisal re: obtaining a home equity loan to cover renovation costs. As he frequently does with home inspectors, Mr. Holmes took aim at the standards and qualifications of the appraisal profession suggesting. A nice rebuttal to the Mike Holmes article by a member of the Appraisal Institute of Canada was published in the Windsor Star. As REALTORS® we rely on market data to assist us in pricing properties as do appraisers. Further, replacement costs for a particular property are often considered as well. None of this is a perfect science because as mentioned above, it is the buyers and sellers that effectively determine market pricing. Mortgage rules have been tightening, banks have become more conservative and seem willing to accept less risk so there may be more than meets the eye behind the situation experienced by the party(s) in Mike Holmes article.  Recently I have noticed that banks are focusing on the assessed value of a property rather than an appraised value as assessments for the most part are lagging behind current market value.
 Licensing requirements for REALTORS® have been increased and I know the Canadian Association of Home and Property Inspectors is working to improve the knowledge and quality of the home inspection profession.  As with any service provider there are the good, the bad and the ugly and time usually has a way of dealing with the latter two.
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