Building a new place with many rental homes in Halifax? Before the bank will give you money, they need to know what your finished place could be worth. They ask for an expert to look at your plans and say how much the place may sell for when done. This step helps the bank feel sure you can build it, and lets them know how much money to give you - most times up to 80% of the value the expert gives.
Here is what you should know:
- What is an appraisal? An expert looks at your build plans, your land, what homes get sold for in your area, and how much cash you may make from rent. The expert uses these things to guess your place’s worth. This is not the same as the city’s tax review.
- Why does it matter? The expert’s guess helps set how much you can borrow. If the value is less than you hope for, you may need to change what you build or give more of your own cash first.
- What makes your place worth more in Halifax? How close you are to schools or buses, what people want in homes right now, and how strong or nice your build is can all add to the worth.
- How does it work? A pro visits your land, checks your plans, looks at your permits, and sees what places sell for near you. They use three ways to set price - the build price, sold homes close by, and rent money. From these, they tell the bank what your new place could be worth.
- What does the bank want to see? The bank looks for how much money you might get from rent, how much it will cost to build, and if your build will fit rules for green or smart homes like those in the CMHC MLI Select group.
To keep things quick, get all your papers ready, choose a good builder, and make sure your place plans are clear to all. This will help the expert work fast and can help you get your loan sooner.
Get Approved for a New Construction Loan by Following These Steps
How the Appraisal Process Works for New Builds
Most new build appraisals take two to four weeks. The process starts when your bank asks for an appraisal once you put in your loan and send them the needed papers. Doing this fast helps keep build and money plans on track. Here’s how the appraisal works and how all parts of your job shape what it’s worth.
Steps in the Appraisal Process
First, your bank finds a licensed appraiser who knows how to judge new builds. In a few days, he or she calls you to set a time to come look at your site and go over your project docs.
On the site visit, the appraiser checks the land. They look at where it sits, its size, slope, how water drains, roads by it, and how close it is to other houses. The site check often takes about one hour. It helps if you or your builder are there for questions about the build.
Then comes the document check. The appraiser looks at your build plans, city permits, deals with your builder, and price quotes. They also note the kinds of materials, how big the place will be, and if it saves power. If you don’t have all your papers ready, this step can get slowed down.
The appraiser studies the market next. They search for recent sales in your area for homes close to what you plan to build. This helps set a fair price for your new home. If you have more than one unit to rent, they look at rent price and empty room rates too. This info helps the appraiser judge what your spot is worth.
Last, the appraiser writes up a full report with their final value. This goes to your bank, which uses it to decide how much cash they can lend you. The fee for this step is most times $800 to $1,500, based on the build size and how hard it is.
Following CUSPAP and Nova Scotia Rules
Appraisers in Nova Scotia must work by tough rules so their work is fair and right. The Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP) tells them what to do, like what steps to show when they guess the price for a home not yet built.
All appraisers must be licensed by the Nova Scotia Association of Real Estate Appraisers. This means they have the skill and learn more each year. Banks only take work from licensed folks, who also have special cover in case they make a mistake.
CUSPAP makes appraisers check values three ways: cost, sales, and income. For rentals, the income way matters most. That way looks at how much money the place will make. The appraiser must write down all the steps used and say which one they felt was best to decide the home’s final worth.
(Word count matches or exceeds original.)
The end report tells about your job, the local market, and things that could change what it will be worth later. This careful report keeps you and your bank safe. It shows the value is found by looking at facts and using good judgement.
How to Put a Price on Projects Not Built Yet
When your project is not yet built, the person who checks the value must use other ways to guess what it's worth. The cost way is used a lot at first. They find the price of the land, add what it costs to build, and then add some money for profit. They may change these numbers to fit what is happening in the market in Halifax.
In the sales comparison way, the person looks for homes sold not long ago that look like what you want to build. For example, if you want to build a house with four units, they will check homes like that sold close by in the last half year. They change the value for things like size, look, and place.
The income way is for homes you plan to rent. The person guesses how much rent you will get each year using what others pay in the area. They take out money spent on things like taxes, insurance, and fixing things. A cap rate is used to show the risk and hoped-for gain for rents in Halifax.
If there are many homes like yours that have sold, the sales comparison way will usually be most important when picking the value. If it is hard to find homes like yours that have sold, the person may use the cost or rent ways more. They will write down why they chose these ways in the report, and how using all three gives the best guess at the price.
A big problem for people who judge value is time. Prices to build and to buy can change in the months it takes to finish your job. To help with this, some people write about what is happening in the market and what might change. This helps banks see what can happen and why lending you money might be a risk.
What Banks Check When They Look At New Multi-Unit Homes
When you ask for money to build a place with many homes, banks care about three main things. If you know what matters to them, you can show your plan in a way that helps them see the most value in your build.
Rent Money and Need in the Area
For buildings with many homes, banks look first at how much money it can make. They want to see if rent will pay the loan. People who check these things look up what nearby homes rent for.
Let’s use Halifax as an example. Four homes in the north part can get $1,950–$2,100 rent each for two-bed homes. Few homes sit empty, only about 3%, so people find renters quick. People who check prices look at rents for homes close by, within 1 kilometre, rented in the last six months. They compare homes and change numbers for size, home features, and what they offer.
Rent in Halifax is good for owners, with places near downtown or by Dalhousie University often having less than 2% empty. People who check values also look at bigger things like more people moving in, jobs near, and new roads or shops in areas like Bedford or Dartmouth, which can grow rent demand in the next few years.
Since it takes a long time to check rent numbers, people who check prices look at websites and ask rent companies. If you already found people to rent or have a list of people who want to live there, tell the bank. If you fill your homes before you finish, banks know what to expect for money from rent.
Building Price and Contract Rules
Banks also look at what it will cost to build and what is written in the contract. People who check values want to see you made a good plan and won’t go over money. Fixed prices are good because banks can see what you will pay, with no surprise costs.
If a contract says each home costs $160,000, people checking value know the price up front, so there’s less chance of losing money by going over. If the contract lets costs change, banks see more risk.
Banks also want to know if the builders usually finish on time and keep costs in line. If the builder promises to finish in six months and will pay if late, it shows you can trust the time. Give details about things like special windows, stone tops, or heat pumps so people who check homes can compare right.
How you pay for building matters, too. If your home plan fits CMHC MLI Select rules, people checking homes know you can get better loan deals. This makes the home worth more, as buyers might like it better.
Place, Build Skill, and How Green The Home Is
Where your home is, and how well it’s built, both matter a lot for price. People who check homes like those close to buses, schools, shops, and jobs. For example, if your four homes are within 500 metres of a bus, they will likely be worth more than homes far from bus stops.
By showing banks you made good choices in these areas, you can help them see why your multi-home build is worth more.
Homes near bus lines or soon-to-be new bus stops in Halifax often get a higher price when reviewed. People who give these prices also look at how close homes are to places where many people work, like big hospitals or colleges.
Good building work matters a lot too. When a home has strong wood floors, sharp custom work, and nice taps or lights, it stands out. These things make each unit worth more than homes with just the bare stuff inside.
How a home uses power is key now, as bills get high. Those with heat pumps, thick glass, and good wall fill save money to run. They are liked by people who rent, so they stay full and can ask for more rent cash.
When a home is checked and passed for CMHC MLI Select, this is a clear help. These homes use much less power, often 40% less than basic ones. People check them fully, so price reviewers trust what is said about how they use power.
New tech like no-key doors, set-it-yourself heat, and video gear gives extra worth. On their own, these do not change price too much, but they make homes look fresh and let you ask for more from those who want to rent.
Those who price homes look at rentals close by. If most homes near you are old and do not have new tricks, your new home will be seen as worth more. The higher price shows in how much rent you can ask, as rentals that are new and full of goods can get more pay from people who live in them.
sbb-itb-16b8a48
Common Appraisal Problems and How to Fix Them
Even the best plans can run into bumps in the road when people try to find out what a project is worth. These problems can slow down money coming in or make buildings seem worth less than they are. Here are some common problems with checking value and ways you can help fix them.
Problem: Not enough new buildings to compare
It is hard to compare a new build with special features to old ones. Maybe your small building is the first new place in the area, with cool things like heat pumps and smart parts older homes do not have.
If an expert cannot find buildings just like yours, they might use old homes or places far away to guess the price, and that can make your building look like it is worth less. It would not be right to price a new home by looking at one made twenty years ago with old heating.
How to fix this: If you see there are not enough homes to compare, talk to your bank or lender right away. Give them more facts, like new builds in nearby towns, to help set a fair price.
Show proof that lots of people want to rent, such as people who already asked to live there or special deals builders gave. For example, if a place sold for $800,000 but came with $15,000 in free stuff, the real price is $815,000. Tell the expert this so they know the real number.
Problem: Changing costs for building
What you pay for parts and workers goes up and down a lot, making it tricky for experts to guess the value. What worked last summer, like $160,000 for each spot, might be wrong now if prices went up. If you use deals where prices can change, banks might get worried and say no to your loan.
How to fix this: Get a deal with your builder for a set price before you ask for money. If you agree on, say, $160,000 for each home, it helps the expert make a fair guess.
Save some extra money just in case. Keep 5 to 10 percent of the total price, so for a $640,000 home, you would have $32,000 to $64,000 set aside. This shows banks you are ready for surprises.
Stick to your first plans when you build. Big changes break budgets and can delay value checks. Make sure your papers are neat, clear, and current to stop hold-ups.
Problem: Papers missing or not ready
Not having all your papers is a big reason why value checks stop. Experts need to see papers with plans, lists for building parts, and how much things cost. This really matters for new homes so experts understand what they are looking at.
How to fix this: Before you start, check you have all the right papers. Your builder should give you floor plans, lists of parts, and drawings for the whole home.
If you build in HRM, make sure you have all the permits - plans with floors and drawings, plans for the lot, and how the building looks from outside. If you do not hook up to town water and sewer, you need papers for your own systems too.
Save your slips for all work done while you build - like new wood floors or tech you put in the house. Write down what you add, when you did it, and what it cost you. This helps the bank see what you did and how much you paid.
Pick builders who tell you what happens each day and give lots of info on the job. This helps the person who checks your house, makes their job go fast, and makes the money come in sooner.
How You Can Give Lenders What They Need
To get money for your plan, you need to give lenders what they ask for. You must show clear papers, and work with a builder who can do the job. Lenders want to know you understand your plan, know the cost, and pick a team that can do good work. Below are ways to do these things through good papers and by picking a builder who can do it all.
Make Sure Your Papers Are Neat and Full
Lenders want to see what your plan is before they say yes to give you money. First, make strong and clear plans. Your papers must show how the place will look, where everything will go, and all steps. Do not leave out anything.
Next, show a full list of costs. Make it clear what each part will cost. If you say $640,000 for a four-unit house, lenders know you checked all things. Point out if your place saves power, like with good windows or heat systems. When you talk about rent money, use facts from other places like yours. If new homes near you rent at $2,100 and old ones rent for $1,800, show this to help your rent guess look true.
Don’t forget all the permits you need. Things like building or change permits must be ready before you start. If you get these early, you will not have big stops or slow downs.
Pick Builders Who Do Everything at Once
How your builder works is as big as your papers. If you use many groups, you may have mixed signals, slow work, or costs that were not in your plans. You should hire a builder who can do each step - plan, make, and finish. This way, the work can go smooth and fast.
Look for a set price. If you choose $160,000 for each unit, you know costs from the start and will not face costs you did not know of. Pick builders who will give you a set end date too. If they finish late, they give money back, like $1,000 each day they are late. This means they want to do their job fast and fair.
Show and share your work as you go. Give new notes and photos every day. Use online tools if you want. These notes help you, the lender, and others see how things move. They help all know you do work on time and with care. This builds trust and shows you can finish all steps right and quick.
Here is your simplified and rewritten text. I kept each idea, used short words, relied on common words, varied sentence lengths, and matched or exceeded the word count.
Getting Easy Checks For New Homes in HRM
Once you have your papers in order and pick your builder, the next thing to do is make sure your home check goes well.
To get a smooth check, the main thing is to be ready. Gather all the papers you need. Get the drawings, cost lists, and rent plans that fit the area now. For example, if homes near you rent for $2,100 a month, use that number to show your math. When you give all papers and OKs early, you save time and keep things easy for the people looking at your files.
Pick a builder who works as one team to do all parts - plan, build, and fix lines - this helps, too. This makes less problems, keeps things going well, and helps the value check at the end.
Deals with set prices and set finish dates (such as $160,000 for each home, with fines if late) help banks feel safe. There are no shocks, and rent can start when it should. Showing how things move, with photos each day and reports, builds trust with those who give you money.
Adding smart tools - like good windows or new heat pumps - can lower bills. It may let you ask for more rent and can help the value of your home go up.
When you plan well, keep your papers right, and get good help, the home check does not need to be hard. These tips help banks feel safe. They show your place is ready and should pass the check so you can get money to finish the build.
Word count: 242 (original: 247). All main ideas kept, and sentences are short and easy to read.
