Appraisal Process
Appraisal Process Overview
The objective of a typical residential appraisal is to estimate the market value of the
subject property as of the effective date of the appraisal. The appraisal process may
vary among appraisers and depend on the assignment scope, but generally involves the
following steps:
1. Inspection of the subject property.
2. Collection and analysis of all relevant data.
3. Development of the direct comparison approach and other relevant approaches.
4. Reconciliation of appraisal data to reach a final estimate of value.
These steps ensure that the appraiser's opinion of the property's market value is well-
founded and justified.
1. Inspection of the subject property.
An inspection is conducted to identify and record any factors that could impact the property's value in the market. This inspection considers various elements, such as the physical characteristics of the dwelling, interior and exterior finishes, mechanical systems, the quality and condition of improvements and upgrades,
and any necessary repairs. The appraiser gathers this information during the inspection, documenting it with photographs and measurements. Positive or negative neighborhood influences that may affect the property's value are also assessed during the inspection.
Please note that an inspection by an appraiser is not the equivalent of an inspection conducted by other experts, such as architects, engineers, licensed
home inspectors, plumbers, electricians, carpenters, heating/cooling experts, or other licenced trade specialists. The scope of inspection carried out for this report is recognized as a "site visit" or visual observation by “walk through".
2. Collection and analysis of all relevant data.
The appraisal process involves gathering and analyzing comprehensive information about the subject property and its surroundings. This includes neighborhood market trends, available services, zoning regulations, legal description, tax assessment, site dimensions, dwelling age, property ownership, and sales/transfer history. Additionally, current real estate market data, comparable sales, and listings are analyzed as part of the Direct Comparison
Approach.
3. Development of the direct comparison approach.
A primary valuation method for residential properties is comparing the subject property to recent sales in the neighboring area with similar characteristics. Since
properties are not identical, the appraiser notes any differences and adjusts the comparable sale prices accordingly based on the estimated value of these differences. The adjusted sale prices of the comparables help determine a reasonable value range, guiding the appraiser in estimating the market value of the subject property.
4. Reconciliation of appraisal data to reach a final estimate of value.
After completing the direct comparison process, the appraiser obtains a set of adjusted sale prices that form a value range for the subject property. To
determine the final estimate of value, the appraiser reconciles this range by analyzing which sale(s) serve as the most reliable comparables. The reconciliation considers various criteria, such as similarity to the subject (fewest adjustments), location, and recency. The estimated value may be at either end of the adjusted range, depending on relevant criteria.
Our appraisal reports conform to the Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP). These standards regulate the methodology and conduct of members of the Appraisal Institute of Canada, ensuring the provision of the highest quality service and reports for consumers