The specific property being appraised, evaluated, or purchased in a real estate transaction. When an appraiser visits to determine market value, or when a buyer's agent pulls comparable sales, the subject property is the one being assessed. All analysis, comparisons, and valuations are centred on this property.
Why It Matters
Understanding which property is the 'subject' matters when reading appraisals and market analyses. The appraiser compares the subject property to recent sales of similar homes, adjusting for differences. If the subject has features that comps lack (or vice versa), the appraised value shifts accordingly -- and that affects your financing, purchase price, and negotiation strategy.
Real-World Example
Your lender orders an appraisal on a townhouse in Ajax you are purchasing for $725,000. The appraiser visits the subject property, measures the living area at 1,450 square feet, notes the finished basement and updated kitchen, and then selects three comparable sales within a kilometre. One comp sold for $710,000 but had no finished basement, so the appraiser adjusts upward by $30,000. Another sold for $740,000 with a larger lot, adjusted downward by $15,000. The reconciled appraised value of the subject property comes in at $730,000, supporting your purchase price.
Ontario & GTA Context
In Ontario, the lender -- not the buyer -- selects the appraiser, and the appraisal must comply with Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP). If the appraised value comes in below the purchase price, the buyer must make up the difference in cash or renegotiate. In competitive GTA markets, low appraisals have occasionally derailed deals, especially during periods of rapid price escalation.
How It Works in Practice
When reviewing an appraisal report, pay close attention to the adjustments made between the subject property and each comparable. Large adjustments suggest the comps were not closely matched, which weakens the appraisal's reliability. If you disagree with the appraised value, you can request a reconsideration with supporting evidence.
Common Questions
What happens if the appraisal is lower than the purchase price?▾
Can I choose the appraiser for my property purchase?▾
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