A chartered appraiser is a professional whose job is to formulate an objective opinion on the value of a property or a real estate right at a given date.
Prejudices, personal interests and preferences are not part of his professional approach.
To arrive at a realistic judgment of a property’s value, the chartered appraiser uses a combination of three proven methods: the cost, comparison and income methods.
The role of the chartered appraiser is to provide a reasoned opinion of the market value of a property. Although they work mainly in real estate appraisal, chartered appraisers can also estimate the value of a business, a company or movable equipment. Some certified appraisers have experience in specific areas such as farmland, industrial, infrastructure or transportation. Also, the expertise of the chartered appraiser can be used in a variety of circumstances.
A certified appraiser is a member of a professional association.
As a member of a professional order, he or she must respect standards of practice and a code of ethics in addition to being subject to inspections on his or her professional practice. Also, he must subscribe to the professional liability insurance which constitutes an additional recourse for his customers.
The Certified Appraiser designation ensures both quality services and recourse for the public. To verify if a certified appraiser is truly a member in good standing, it is possible to contact the OEAQ or consult the Membership Roll.
Under section 36 of the Professional Code: “No person may in any way: (…) use the title of “chartered appraiser” or “chartered appraiser” or a title or abbreviation that may lead to the belief that he is one, or use initials that may lead to the belief that he is one or the initials “É.A.” or “C. App. App.”, unless he holds a valid permit for that purpose and is registered on the roll of the Ordre professionnel des évaluateurs agréés du Québec.
The certified appraiser is a professional with unique knowledge and skills.
WHY DEAL WITH A CERTIFIED APPRAISER?
A chartered appraiser is retained because his or her opinion is reasoned, reliable and unbiased, making him or her a valuable real estate expert and advisor. This page provides several examples of areas in which a certified appraiser is involved.
WHEN SHOULD I DEAL WITH A CERTIFIED APPRAISER?
The Chartered Appraiser’s approach is based on a methodical review of the market to arrive at objective conclusions. Its mandate may include the following steps:
- Mandate definition
- Definition of the purpose of the evaluation;
- Identification of the services required and the type of report requested;
- Estimate of fees and report production time.
- Research
He undertakes research by :
- A tour of the property to verify the size, materials, maintenance condition, functional utility of the components and layout, and to survey the physical characteristics of the site.
- Neighborhood study to learn about local market trends, location of the building in question, availability of building lots, building use, availability of services, and building price and rent levels;
- The statement of municipal regulations, taxes and utilities;
- The reading of the titles, the consultation of the plans, the analysis of the servitudes and other real rights which can have effects on the utility and the value of the building.
- AnalysIs
Its rigorous analysis aims to assess:
- Optimal use of the land and the building;
- The apparent age of the building and estimate of the remaining productive life of the components;
- Recent sales of comparable properties in the neighbourhood in order to measure, by comparison, the probable value of the subject property taking into account its advantages and disadvantages;
- Recent sales of building lots in the neighborhood;
- Income and expenses of the property and its comparables.
Follows an estimation process:
- From the cost of replacing the building and calculating the depreciation due to deterioration, aging, functional obsolescence and economic obsolescence, estimating the cost of work that can correct the deterioration and functional obsolescence and estimating the probable cost of modifying and renovating the building where necessary;
- Lease terms and estimated potential revenues from building leasing and occupant services, probable occupancy rate, operating costs and projected net operating income;
- The cost of financing, specific tax implications and an estimate of the economic value by discounting the probable net return given the rates of return on real estate investments.
- If necessary, the chartered appraiser will engage the services of other professionals to ensure that his or her analysis takes into account all information that has a particular impact on the use and value of the property.
A rigorous process
In the final analysis, the accredited evaluator will need to compare the results from each of the three methods. His or her expertise and experience will enable him or her to make judgments about the reliability, relevance and timeliness of the data to which he or she has had access.
The market value obtained by the method(s) with the highest degree of accuracy for the type of property and purpose of the appraisal will be used.
In addition to the amount of the market value thus obtained, the report submitted by the chartered appraiser to his client elaborates on the reasons supporting this conclusion and specifies all the elements substantially influencing the value of the property. So,the customer has an opinion motivated by a serious argument. The chartered appraiser may also agree with his client that the report produced will be a form containing a summary of the information used to establish the value in compliance with the standards recognized by the Order.
Source : https://oeaq.qc.ca/
