If you want to determine the market value of your home, a certified appraiser is essential. While we’ve mentioned this expert in previous articles, we haven’t explored their role and the various tasks they typically undertake in detail.
That being said, let’s explore the crucial role of the real estate appraiser. Let’s dive in!
What is a certified appraiser?
A certified appraiser is a professional who offers an objective assessment of the market value of real estate properties. Using various evaluation and analysis methods, they conduct a thorough review and produce a detailed report that helps clients make informed decisions.
Certified appraisers work in both public and private sectors and are called upon in various situations, including:
- Purchasing or constructing a building.
- Selling a property.
- Negotiating mortgage refinancing.
- Dividing family assets.
- Conducting municipal assessments.
- Determining the reconstruction value of condominiums.
What does a certified appraiser do?
Certified appraisers have a wide range of responsibilities that extend beyond simply conducting assessments. Although they are mainly recognized for their valuation work, their role includes several key tasks.
Before beginning their research and analysis, appraisers need to clearly define the terms of reference and understand the client's reasons for requesting their services. Depending on the purpose of the appraisal, they will identify the necessary services, costs, and deadlines to complete the assignment.
A certified appraiser plays a crucial role in ensuring that their assessment is thorough, accurate, and tailored to the specific needs of their clients. Let’s take a closer look at how it is done!
1. Research and gathering of information
Once the terms of references are established, the appraiser begins the research necessary for the assessment. This phase involves gathring a range of relevant documents and verifying the accuracy of the collected information. Depending on the specific case, this may include:
- Assessment role
- Municipal taxes records
- Residential or commercial lease
- Operating expenses
- Certificate of location
- Zoning by-laws
- Architectural plans
2. Visit of the property
After gathering all the preliminary information, the certified appraiser conducts a visit to the property in question. During this visit, they examine the entire property and its features, often taking photographs of both the interior and the exterior to support their analysis and reporting.
It’s important to note that appraisers' visits are distinct from that of a building inspector. The purpose of the appraisal is not to identify defects or potential issues, but rather on assessing the general condition of the property by evaluating:
- Levels of wear
- Dimensions
- Key structural elements
- Quality of materials used
In addition to examining the property itself, the appraiser also assesses the surrounding neighbourhood. The immediate environment can significantly influence a property’s value, so the appraiser considers both strengths and weaknesses, such as:
- Accessibility via public transit.
- Proximity to schools.
- Availability of local services and amenities.
3. Evaluation and data analysis
After gathering all the necessary data, the appraiser can determine how to establish the market value of the property. This analytical process relies on three primary evaluation methods:
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Comparable method: this involves comparing the property to similar properties that have recently been sold to determine its market value.
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Cost method: this method evaluates the value of the land and the depreciation of the building to determine the overall worth.
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Income method: this approach analyzes the property’s financial performance, including income generated and related expenses.
Typically, the appraiser uses at least two of these three methods to establish a reliable market value. Once the analysis is complete, the appraiser provides the client with a written report that includes:
- Identification and description of the property.
- Factors that influenced the appraiser’s judgment.
- The appraiser’s conclusion regarding the property’s value.
This comprehensive report gives the client a solid, professional foundation to justify the price of their property.
What does it take to become a certified appraiser?
To be recognized as a certified appraiser, one must be a member of a professional association, such as the Ordre des évaluateurs agréés du Québec (OEAQ). Members are held to high standards of practice and adhere to a strict code of ethics, which includes ongoing training and education.
This commitment to professionalism helps ensure that personal biases and conflicts of interest do not affect their work, making them trusted partners in real estate transactions.
Specializations in real estate appraisal
In Quebec, certified appraisers can specialize in various types of real estate appraisal beyond assessing the market value of homes and condos. Many appraisers focus on specific sectors like agriculture or industry, while others concentrate on municipal property assessments.
According to the OEAQ, the distribution of appraisers across different sectors is as follows:
- Private firms: 54%
- Public sector: 20%
- Municipal sector: 20%
- Financial institutions: 20%
In addition to property assessments, some certified appraisers can estimate the value of businesses, companies, or movable equipment.
Interestingly, the training required to become a certified appraiser can also provide a pathway into the real estate management profession. While many appraisers may choose to specialize in one area, they often have opportunity to be involved in property management, further broadening their professional opportunities.
Looking for an appraiser to determine the value of your property?
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