Real Estate Appraisal is a unique profession - an exceptional opportunity to use a wide variety of skills. The following information will provide you with an understanding of the career and the designation requirements.

This material is intended to provide an introductory overview of the profession's many facets. You may obtain further information through the Appraisal Institute of Canada's other publications as you proceed toward your career goals.

We welcome further inquiries (E-mail to info@appraisal.ab.ca) and look forward to providing any additional support you require.

The Alberta Association's Relationship with the Appraisal Institute of Canada (www.aicanada.ca)

Founded in 1938, the Appraisal Institute of Canada is the national society of professional real estate appraisers. The Institute is dedicated to serving the public interest through continually advancing high standards of the appraisal profession by granting use of the CRA (Canadian Residential Appraiser) and AACI (Accredited Appraiser Canadian Institute) designations.

The Institute has more than 5,000 members across Canada. Designated members, those who have earned use of the AACI or CRA designation, provide reasoned calculations, widely respected by the courts, real estate corporations, chartered banks, trust companies, mortgage lending institutions, all levels of government and private individuals.

The national office is located in Ottawa, with association offices in each province. The Alberta Association - AIC represents the Appraisal Institute of Canada in Alberta, and provides services and information to AIC members and the public in that province. Our office is available to assist you and respond to questions relating to membership and services.

Code of Ethics & Uniform Standards of Professional Appraisal Practice (USPAP)

All AAAIC Members are governed by a Code of Ethics and Uniform Standards of Professional Appraisal Practice, which establishes minimum standards of performance in rendering of professional services. This ensures that users of appraisal services can have full confidence in AAAIC members.  

Networking and Fellowship

The chance to meet with and learn from one's colleagues is an essential component of the development of every professional. The AAAIC has Chapter meetings, seminars, and an annual conference, all of which provide a forum for networking and fellowship.

Educational Development

Effective January 1, 1998, the education program is available via distance learning through the University of British Columbia (www.realestate.ubc.ca), excluding assessment and agricultural options.

Professional Development

Opportunities for members to continue their professional development are offered through national and provincial conferences and seminars. The Association and local Chapters also hold regular meetings, which provide a forum of discussion, education and networking with peers. All designated members must meet the requirements of the AIC's mandatory recertification program.

Professional Liability Insurance Program

The Appraisal Institute of Canada provides its members with professional liability insurance coverage for errors and omissions in the performance of the services for which they are qualified by the Institute. The program covers the negligent errors and omissions of members for work performed in Canada. This coverage is mandatory for all members.

Group Insurance

A group insurance program is available to Institute members at very competitive rates. The program includes dental and extended health insurance, general life insurance, disability insurance and business expense disability insurance. Each plan can be specifically designed to suit the needs of the appraiser and pooled to ensure the best possible benefits and premiums.

What is an Appraisal?

An appraisal is an impartial estimate or opinion of value, usually written, of an adequately described property, as of a specific date, and supported by the presentation of an analysis of relevant data.

Types of Appraisal Reports

There are six combinations of appraisal reports permitted under the Uniform Standards of Professional Appraisal Practice (USPAP) Standard 1:

• Complete Appraisal - Self-contained Appraisal Report
• Complete Appraisal - Summary Appraisal Report
• Complete Appraisal - Restricted Appraisal Report
• Limited Appraisal - Self-contained Appraisal Report
• Limited Appraisal - Summary Appraisal Report
• Limited Appraisal - Restricted Appraisal Report

All Reports contain the following Information:

• The Estimate of Value
• The Effective Date of the Appraisal
• The Certification and Signature
• The Purpose of the Appraisal
• The Qualifying Conditions
• The Condition of the Neighbourhood
• An Identification of the Property and its Ownership
• An Analysis and Interpretation of the Data and the Assumptions Made
• The Processing of the Data by One or More of the Three Approaches to Value
• Other Descriptive Support Material such as Maps, Plans, Charts, Photographs, etc.

The Residential Appraisal Form Report

This is a form completed by the appraiser on a residential property. The report includes general information, such as who owns the property, the address, legal description, taxes, assessed value and age of the dwelling. It also describes the neighbourhood in terms of its age, distances to schools and shopping centres, common types of dwellings, services and utilities available, etc.

How Value is Estimated

There are three basic methods or arriving at an indication of value:

• The Cost Approach estimates the cost to build a new building identical to the subject being appraised, at current prices, subtracting accumulated depreciation and adding the estimated land value.
• The Income Approach relates to income-producing property and is based on the theory that value is the present worth of the income stream which the property is capable of producing when developed to is highest and best use. The net operating income from the property is capitalized into value by an appropriate method and rate.
• The Direct Comparison Approach is based on the theory that an informed purchaser would pay no more for a property than the cost of acquiring another existing and equivalent property. The value estimate is based on the selling price and listings of comparable properties.

To arrive at a final estimate of value, the appraiser selects the value indicated by the approach most appropriate for the property and supported by the most reliable, factual and relevant market data, which has been analysed and verified.

The Professional Appraiser

The accuracy and quality of an appraisal depends upon the individual who makes that estimate, the skills that person uses, and the availability of relevant facts. A qualified appraiser is recognized by the designations AACI or CRA, which are awarded by the Appraisal Institute of Canada.

• AACI (Accredited Appraiser Canadian Institute) designated fully-accredited membership in the Institute and may be used by the holder in connection with the appraisal of a wide range of property.
• CRA (Canadian Residential Appraiser) designated members are qualified in the appraisal and valuation of individual undeveloped residential dwelling sites and dwellings containing not more than four self-contained family housing units.
• P.App (Professional Appraiser) may only be used by accredited members and must immediately follow the AACI Designation, (for example: Jane Doe, AACI, P.App)

Members must successfully complete a rigorous course of studies in all aspects of real estate valuation and meet other requirements before they are awarded use of a designation. Once members receive a designation, they must continue their professional development through a mandatory recertification program by attending seminars, courses or conferences.

An Excellent Future

The appraisal of real estate is a fascinating, multi faceted profession which brings you into contact with a wide variety of business situations and with people from all walks of life. Careers are available in:

• private practice
• national corporations
• all levels of government
• lending institutions
• real estate companies
• development companies

What Does an Appraiser Do?

As an appraiser, you may be called upon to provide a professional opinion on:

• Current value of property being purchased or sold
• Future value of property being built Value for mortgage or lending purposes
• Value to assist in investment decision
• Value to measure property, tax assessments, capital gains and other taxes
• Verification of damage claims resulting from fire, rain, hail, windstorms and other disasters
• Value of property to determine compensation where property is to be expropriated
• Value of assets
• Value of property involved in litigation.

Feasibility studies and consulting services are also provided by the professional appraiser.

As an appraiser, you will observe, research and analyse the real estate market, as well as the actions of the people who operate within it. You are interested in facts, and will thoroughly investigate the property being appraised. In order to do the job to the best of your ability, you will keep abreast of current market trends, the general value of real estate in your area, taxes and special assessments, and all other factors which affect the value of the property.

Private Practice Appraisers

If your real estate career takes you into private practice, you will probably prepare appraisal reports on a fee-for-service basis. Your clients will include mortgage lenders, lawyers, property owners and developers.

Institutional Appraisers

The term "institutional appraiser" refers to an appraiser who is employed by a corporation such as a bank, trust company, manufacturer, retail or chain store, etc. As an appraiser in this area, you will usually earn a salary and work solely for your employer. The requirement for institutional appraisers has come about though corporate management's recognition of the value of professional appraisal training. You will primarily appraise the value of property your employer owns or has an interest in, through a mortgage or development plan.

Government Service Appraisers

All levels of government and government agencies employ real estate appraisers. Many governments specify that appraisers for their senior positions must hold designation granted by the Appraisal Institute of Canada. If you are employed by government, you will deal with land acquisition and the administration of government real estate holdings. Since real estate taxes are the major source of municipal revenue, you will also assess the value upon which property taxes are based.

Publications

The AAAIC publishes a regular newsletter titled "The Alberta Appraiser" which is circulated to members in the Province of Alberta free of charge, and contains Association information and articles dealing with topics of interest to those practicing real estate appraisal within the Province.

The Canadian Appraiser/L'evaluateur Canadien is the Institute's quarterly magazine and contains articles on current issues by experts in real estate appraisal and related subjects.

The Appraisal Institute's newsletter, entitled the Digest, is published three times per year. This newsletter keeps members appraised of current activities, policies, and developments within the profession. A classified section is available to members wishing to place an ad.

The annual Directory of Designated Members lists Institute members across Canada who hold use of the AACI or CRA designation. In addition to being distributed to all members, a limited number of copies are available through the provincial association to users of appraisal services.

The Institute's Research and Development Fund periodically publishes original manuscripts containing current opinions on various aspects of the real estate appraisal profession.

Certain forms and log books required by members may be available for download from the Provincial Office website at www.appraisal.ab.ca through the Member Info section.

Materials needed for demonstration appraisal reports will be available, as of September 1999, from the UBC Real Estate Division's website at www.realestate.ubc.ca.