What is an appraisal?
What does an appraiser do?
Why would a person need an appraisal?
What does the appraisal report contain?
How are appraisers certified?

What is an appraisal?
An appraisal is the act or process of estimating value. It can be given orally, but it is usually a written statement of market value, or value for loan purposes or value as described by the appraiser of an adequately described property as of a specific date.

What does an appraiser do?
The real estate appraiser is a professional whose services are required by private, corporate and governmental bodies to evaluate real estate (real property) for a variety of reasons.

The fundamental role of an appraiser is to provide a professional opinion, usually an estimate of market value, to be used in making real estate decisions. Appraisers develop appraisal reports that are the conveyance to another of an appraisal.

Why would a person need an appraisal?

Real estate appraisals might be required for, but not limited to, the following uses:
1. Purchase or sale
2. Extension of mortgage credit
3. Expropriation by a public body
4. Insurance: coverage, claim or settlement
5. Litigation (determination of marital or business assets)
6. Arbitration
7. Asset valuation
8. Land-use studies
9. Feasibility analysis
10. Taxation
11. Determination of value of an Estate

As with other professional disciplines and in keeping with changing socioeconomic forces, appraisal theory and standards evolve continually. Appraisers must acquire a knowledge of sociology, economics, geography, mathematics, public administration, political science, engineering, accounting and law. All these areas provide the information and the knowledge that is required in the appraisal process. Of course, in an area where the appraiser's knowledge is insufficient to meet the requirements of a specific assignment, a consulting specialist can be retained to provide the required information.

What does the appraisal report contain?

As set out in the Uniform Standards of Professional Appraisal Practice (USPAP), every appraisal prepared by a member of the Appraisal Institute of Canada must comply with Standards Rule 2-2 and must contain the following 12 elements:

1) identify and describe the real estate being appraised;

2) state the real property interest being appraised;

3) state the purpose and intended use of the appraisal;

4) define the value to be estimated;

5) state the effective date of the appraisal and the date of the report;

6) state the extent of the process of collecting, confirming and reporting data;

7) state all assumptions and limiting conditions that affect the analysis, opinions and conclusions;

8) outline the information considered, the appraisal procedures followed, and the reasoning that supports the analyses, opinions and conclusions;

9) outline the appraiser's opinion of the highest and best use of the real estate, when such an opinion is necessary and appropriate;

10) explain and support the exclusion of any of the usual valuation approaches;

11) describe any additional information that may be appropriate to show compliance with, or clearly identify and explain permitted departures from the specific guidelines of Standard 1; and,

12) include a signed certification in accordance with Standards Rule 2-3.


USPAP specifies that there are several acceptable formats of appraisal reports including a "Self-Contained Appraisal Report", a "Summary Appraisal Report" and a "Restricted Appraisal Report", as outlined on the following Summary of Appraisal Reporting Formats. The essential difference among the three options is in the use and application of the terms describe, summarize and state. Describe is used to define a comprehensive level of detail in the presentation of information. Summarize is used to define a more concise presentation of information. State is used to define the minimal presentation of information.

According to USPAP, there are two appraisal types; a complete appraisal without departure, and a limited appraisal with departure. Within the two appraisal types there are three appraisal formats which, in order of level of detail, are the "Self-Contained Report", the "Summary Report" or the "Restricted Report".

These three formats differ in the use and application of the level of detail. The three levels of detail are further defined by the terms describe, summarize and state.

How are appraisers certified?

The Appraisal Institute of Canada is the most widely accepted professional appraisal organization in Canada. Members must pass a comprehensive series of examinations after achieving a university degree and must maintain a level of ongoing re-certification by continually upgrading their education.

The CRA or certified residential appraiser is trained and certified to appraise residential properties up to a four unit residential building.

The AACI is the highest designation awarded by the Canadian Appraisal Institute and that appraiser is certified to appraise all types of commercial, industrial and residential properties if they have experience for that type of appraisal.

The MAI designation is the highest designation awarded by the American Appraisal Institute and permits that designated appraiser to appraise all types of property.