Market value - Subjective calculations not always a good guide

Paper profits are just that No matter what past appreciation or depreciation rates tell you a property should be worth today, remember that markets can change quickly. The true value of a property today is what a ready and able buyer is willing to pay for it. Don't lose out on a house you really want just because your subjective calculations indicate that it shouldn't be worth what it is in today's market.

Is your home overvalued? more...

What goes up can come down. Houses in Montreal historically have tended to increase in value. The increase in property value due to inflation is called appreciation. But home prices do go up and down, like stock market prices. This is why it's wise to plan to own a home for a reasonable period of time.

Real estate jargon can be confusing. Take the three terms "appraisal," "comparative market analysis" and "market value." What's the difference? Prepared by a professional appraiser, an appraisal is an estimate of a property's value, its utility for a given purpose and its highest and best use. A comparative market analysis is an informal estimate of value performed by a real estate agent or broker. It is based on like sales and generally offers a range of values including probable market value. Market value is what a home actually sells for.

An appraisal and a market analysis are done basically the same way, by taking recent sales of similiar properties and comparing their features (square footage, bedrooms, amenities, etc) to the subject property. Appraisers make value adjustments to ensure the properties are as near alike as possible, i.e. subtracting value if the subject property does not have an amenity like one of the comparables and adding if the reverse is true.