2. Why Do I Need An Appraiser?
Real estate purchases can be intimidating. The municipality charges taxes on home and property, the financer gets a mortgage, real estate agents earn a commission, sellers want the best price possible, and the buyer wants the best value for the money spent. Combine all these interested parties with property values, market trends and new laws, and investing in real estate can be complex, confusing and stressful.
If you are buying a home you want to be sure you pay a fair price. An appraiser provides professional insight and an unbiased estimate, and possibly is the only independent party to a transaction. However, it is often up to the consumer to hire an appraiser to protect their interest when buying a home or property. As protection a buyer should include a clause into their Purchase Agreement specifying that an appraisal be done that meets or exceeds the agreed upon price.
When it comes to making real estate decisions, knowledge is your bargaining tool. The best way to reduce your liability and be assured of a fair property valuation is by hiring a professional real estate appraiser of the Appraisal Institute of Canada (AIC).
When you hire an AIC appraiser, the only person that appraiser is working for is you. It is the appraiser's job to determine the market value of any home and real property so that you know the value of what you are buying or selling. AIC appraisers provide objective opinions of value, completely independent of any personal or business interests or bias with respect to the parties involved.
In Canada, all real estate appraisers are regulated by the Appraisal Institute of Canada. This national organization ensures that all real estate appraisers in the country are properly trained and accredited. Through conferences, publications and net working, AIC members keep up-to-date with changes in market trends and laws that affect real estate values. Founded in 1938, the Institute has 4,500 members across Canada and is dedicated to serving the public interest through continually advancing high standards for the appraisal profession.
AIC designated appraisers provide valuations that are widely respected by the courts, real estate corporations, chartered banks, trust companies, mortgage lending institutions, all levels of government and private individuals.
To ensure high standards in the appraisal industry, the AIC grants the use of two designations, the Accredited Appraiser of the Canadian Institute (AACI) and the Canadian Residential Appraiser (CRA). Designated CRA's are fully qualified to perform residential appraisals while AACI's are qualified to do residential, commercial and industrial appraisal. Candidate members are mentored by designated members until accreditation.
Both designations ensure that appraisers provide a completely objective opinion of value, independent of any other business interests. AIC educational requirements are very rigorous and formal training can take several years to complete. Candidates earn their designations through applied experience by being mentored (previously called sponsored) by designated members. This ensures that designated members have the necessary experience to complete the job competently and that non-designated members are supervised throughout the appraisal process.
Appraisers with the AIC are committed to a career in the appraisal profession. Many members spend most of their working lives in the profession and bring years of on the job training to each and every assignment. In addition, the AIC has a program of mandatory re-certification of its designations, so members remain current and informed.
Effective September 22, 2004 legislation was passed in Alberta governing the practice of real estate appraisal. The Real Estate Council of Alberta (RECA) now requires all real estate appraisers in Alberta to be licensed under the Real Estate Amendment Act in order for an individual to carry on the practice of a real estate appraiser, advertise or hold him or herself out as a real estate appraiser. Any individual who charges a fee for an estimate of value is subject to the legislation, and if found in violation of the Act could be subject to action under the law or the disciplinary actions of RECA, if applicable.
The Appraisal Institute of Canada governs its members through a strict Code of Ethics and Standards of Professional Practice. Members who do not follow the rules are disciplined up to and including expulsion. In addition, the AIC regularly meets with representatives from Canada's lenders and agencies involved in the lending process to discuss industry concerns.
The AIC is committed to protecting the public interest; that's why programs such as the Liability Insurance have been developed. In fact, in Alberta Appraisal Institute of Canada members are insured providers of real estate appraisal services. A Letter of Opinion is not a recognized report in accordance with Canadian Uniform Standards of Professional Appraisal Practice. Therefore, individuals who rely on Letters of Opinion or valuations provided by non members do so without the protection of the AIC errors and omissions insurance.