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FREQUENTLY ASKED QUESTIONS

Frequently Asked Questions

Below are the answers to some commonly asked questions.  As always, we welcome you to contact us if you have any further questions or comments about our services.



After completing the report, what assurance is there that the value indicated is valid?
How are appraisers certified?
How do I get ready for the appraiser?
What does an appraiser do?
What does the appraisal report contain?
What is an appraisal?
What is ''Market Value?''
What is the difference between an Appraisal and a Comparative Market Analysis (CMA) that a real estate agent prepares?
What is the difference between an appraisal and a home inspection?
Where does an appraiser get the information used to estimate value?
Which home renovations add the most to the price?
Who Actually Owns the Appraisal Report?
Who do appraisers work for?
Why do I need a professional appraisal?
Why would a person need a home appraisal?

After completing the report, what assurance is there that the value indicated is valid?

In communicating an appraisal report, each appraiser must ensure the following:

  • That the information analysis utilized in the appraisal was appropriate.
  • That significant errors of omission or commission were not committed individually or collectively.
  • That appraisal services were not rendered in a careless or negligent manner.
  • That a credible, supportable appraisal report was communicated.

All provinces require that real estate appraisers are licensed or certified. The licensed or certified appraiser is trained to render an unbiased opinion based upon extensive education and experience requirements. To become licensed or certified, appraisers must fulfill rigorous education and experience requirements. In addition, appraisers must abide by a strict industry code of ethics and comply with national standards of practice for real estate appraisal. The rules for developing an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP, CNAREA) or Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP,AIC).

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How are appraisers certified?

There are two different paths you can take to become a real estate appraiser in Canada.

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How do I get ready for the appraiser?

The first step in most appraisals is the home inspection. During this process, the appraiser will come to your home and measure it, determine the layout of the rooms inside, confirm all aspects of the home's general condition, and take several photos of your house for inclusion in the report. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house. Move any items that would make it difficult to measure the structure. On the inside, make sure that the appraiser can easily access items like breaker panels, furnaces, and water heaters.

The following Items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:

  • A building location certificate or survey of the house and property. • A title report showing the legal description. • A recent tax bill. • A list of personal property to be sold with the house if applicable and a list of any recent renovations. • A copy of the original plans .

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What does an appraiser do?

An appraiser provides a professional, unbiased opinion of market value, to be used in making real estate decisions. Appraisers present their formal analysis in appraisal reports.

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What does the appraisal report contain?

Each report must reflect a credible estimate of value and must identify the following:

  • The client and other intended users. • The intended use of the report. • The purpose of the assignment. • The type of value reported and the definition of the value reported. • The effective date of the appraiser's opinions and conclusions. • Relevant property characteristics, including location attributes, physical attributes, legal attributes, economic attributes, the real property interest valued, and Non real estate items included in the appraisal, such as personal property, including trade fixtures and intangible items. • All known: easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and other items of a similar nature. • Division of interest, such as fractional interest, physical segment and partial holding. • The scope of work used to complete the assignment.

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What is an appraisal?

The act or process of developing an opinion of value; an opinion of value.

An appraisal is a thought process leading to an opinion of value. This opinion or estimate is arrived at through a formal process that typically uses the three ''common approaches to value''. They are the Cost Approach - which is depreciated cost (less physical deterioration and other factors), plus the land value. There is the Sales Comparison Approach - which involves making a comparison to other similar, nearby properties which have recently sold. The Sales Comparison Approach is normally the most accurate and best indicator of value for a residential property. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it involves estimating what an investor would pay based on the income produced by the property.

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What is ''Market Value?''

A type of value, stated as an opinion, that presumes the transfer of a property (i.e., a right of ownership or a bundle of such rights), as of a certain date, under specific conditions set forth in the definition of the term identified by the appraiser as applicable in an appraisal.

Market value or fair market value is the most probable price that a property should bring (will sell for) in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus.

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What is the difference between an Appraisal and a Comparative Market Analysis (CMA) that a real estate agent prepares?

The appraiser will visit your home to look at aspects of the property that would influence its value, including its size, design, finishes, systems, the quality of any improvements, lot size and improvements, deficiencies or required repairs.

The appraiser will then research comparable properties that have recently sold or are active in the area (Majority of sales must be used from MLS). With that information in hand, they’ll focus on the most comparable sold properties and make calculations to account for the differences between those properties and your home. That information plus data on general market conditions will then allow them to provide an appraised value for your home.

They’ll also produce a detailed report with their analysis. The appraisal report may also contain a summary of the appraiser’s qualifications and any limitations of the report.

A CMA on the other hand is less formal and done by a real estate broker or salesperson. As with an appraisal, your broker or salesperson will obtain sales and available property data for similar properties in the area. The CMA would typically help you compare similar properties and suggest a range for the potential value for your home. This can kick off a discussion between you and your salesperson about your listing price and sales strategy. A CMA is an informal estimate of market value

The appraiser is an independent voice, with no vested interest in the value of a home, unlike the real estate agent, whose income is tied to the value of the home.

It’s important to note that only a qualified appraiser can conduct an appraisal for you (or a legal document). That means holding a designation from the Appraisal Institute of Canada (https://www.aicanada.ca/) or the Canadian National Association of Real Estate Appraisers (http://cnarea.ca/).

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What is the difference between an appraisal and a home inspection?

The appraiser is not a home inspector nor does he/she do a complete home inspection. An inspection is a third-party evaluation of the accessible structure and mechanical systems of a house, from the roof to the foundation. The standard home inspector's report will include an evaluation of the condition of the home's heating system, central air conditioning system (temperature permitting), interior plumbing and electrical systems; the roof, attic, and visible insulation; walls, ceilings, floors, windows and doors; the foundation, basement, and visible structure.

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Where does an appraiser get the information used to estimate value?

Gathering data is one of the primary roles of an appraiser. Data can be divided into Specific and General. Specific data is gathered from the home itself. Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.

General data is gathered from a number of sources. Local Multiple Listing Services (MLS) provide data on recently sold homes that might be used as comparables. Tax records and other public documents verify actual sales prices in a market. And most importantly, the appraiser gathers general data from his or her past experience in creating appraisals for other properties in the same market.

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Which home renovations add the most to the price?

The answer to this is different depending upon the location of the home. Different markets value amenities differently. Adding a central air conditioner in Edmonton, Alberta may add some value, while putting one in a home located in Alaska might not have much impact.

Renovating a home, in most cases, will add extra value. But rarely will you get a full return on the input costs. The Appraisal Institute of Canada has developed RENOVA, an interactive web-based guide to the value of home improvements https://www.aicanada.ca/wp-content/uploads/AIC-How-to-Value-Your-Renovations-web.pdf

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Who Actually Owns the Appraisal Report?

The Client who engages the appraiser, is the one who owns the report.

In most real estate transactions, the appraisal is ordered by a lender, financial institution, or a 3rd party Appraisal Management Company (AMC). While in most cases, the applicant typically pays for the appraisal service, the lender and/or the AMC retains the right to use the report, or any information contained within the report. The applicant is the lenders client, therefore is not entitled to a copy of the appraisal report from the Appraiser. The applicant may be entitled to a copy of the report from the lender (this is pending on the financial institution being used), but is not entitled to use the report for any other purpose without permission from the lender.

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Who do appraisers work for?

Client: the party or parties who engage, by employment or contract, an appraiser in a specific assignment. The Client may be an individual, group, or entity, and may engage and communicate with the appraiser directly or through an agent.

Intended User: the client and any other party as identified, by name or type, as users of the appraisal or appraisal review report by the appraiser on the basis of communication with the client at the time of the assignment.

Typically, appraisers are employed by financial institutions/lenders to estimate the value of real estate involved in a mortgage transaction. Appraisers also provide opinions in litigation cases, tax matters, investment decisions, and to determine market value at a client’s request.

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Why do I need a professional appraisal?

Anytime the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. If you're selling your home, an appraisal helps you set the most appropriate value. If you're buying, it makes sure you don't overpay. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. A home is often the single, largest financial asset anybody owns. Knowing its true value means you can the right financial decisions.

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Why would a person need a home appraisal?

There are many reasons to obtain an appraisal with the most common reason being real estate and mortgage transactions. Other reasons for ordering an appraisal include: • To obtain a loan. • To lower your tax burden. • To establish the replacement cost of insurance. • To contest high property taxes. • To settle an estate. • To provide a negotiating tool when purchasing real estate. • To determine a reasonable price when selling real estate. • To protect your rights in an expropriation case. • Because a government agency such as the CCRA requires it. • If you are involved in a lawsuit.