Financing/Repossession

In a mortgage financing context, the valuation is based on the market value of a building as security for repayment.

MORTGAGE FINANCING

The appraiser’s role therefore consists in properly advising all parties that finance the building by quantifying and qualifying the value of the mortgage lien.

Gauthier Roy Huot Évaluateurs Agréés is a renowned firm among financial institutions that has an excellent reputation. Our studies and valuation reports meet the standards of the Ordre des évaluateurs agréés du Québec and the specific requirements of each lending institution. Our professional and competitively-priced services apply to a variety of properties.

When it comes to residential properties, the chartered appraiser will analyze the property’s physical and functional characteristics, creating a detailed comparison between the property and comparable buildings sold recently in neighbouring areas, and a valuation of the market’s current conditions that have an impact on the property.

As for commercial or industrial properties, the chartered appraiser will also have to use the income approach in addition to applying the comparative method. The objective of this approach is to analyze the potential revenue of the subject and the retained comparable, and the financial market indicators to estimate the economic value of a property.  

The chartered appraiser provides an opinion on how the contractual rental income reflects the rental potential in the area and/or will make an economic rent estimate of the property. In most cases, the chartered appraiser will then apply the mortgage rate and term method to see if the loan value is similar to the estimated economic value of the property.

Given that financial institutions must meet strict mortgage financing standards, the chartered appraiser is an essential player in this process.


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