Does the purchase price always equate to the final estimate of market value?
A common misconception by purchasing parties is that the purchase price ALWAYS equates to value. If this we the case, there would never be a need to have an appraisal completed on your property. Let’s first consider the definition of Market Value provided by the Appraisal Institute of Canada “The most probable price for which a property should bring in a competitive and open market as of the specified date under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus.” IF a buyer is not cognizant of his/her local market and surrounding conditions, there is a strong likelihood that they might overpay for a specific property”.
