 Consumer Information > Real Estate Appraisal > Using the Services of an Appraiser
Whether buying, selling or financing real estate, you may need to know the value of the property involved. Getting the most accurate opinion of the value is important when making such a large financial decision. To obtain the most accurate opinion of value you may wish to use the services of a licenced real estate appraiser. Real estate appraisers are professionals you can trust to provide you with an independent and objective opinion of value.
Real estate appraisers must to be a member of one of three professional appraiser organizations that operate in the province. In addition, they complete comprehensive education requirements, meet minimum experience requirements and comply with professional standards of practice set out by their professional association. Real estate appraisers are also required to keep up-to-date with changes in market trends, factors and laws that may impact real estate values.
In Alberta, real estate appraisers are required to be authorized (licensed) by the Real Estate Council of Alberta (RECA). They must also comply with the standards of practice established by the Real Estate Act and Rules, and which are enforced by RECA. Additionally, RECA requires real estate appraisers to carry professional liability insurance, which provides further protection to consumers.
To find if a real estate appraiser is licensed by RECA, click here.
For information on how to choose a real estate appraiser click here.
Below is further information about licensed real estate appraisers. Select the link that applies to you.
Residential Real Estate
Commercial Real Estate
Financial Institutions
Accountants
Residential Real Estate
Buying or selling a residence is often the single largest financial decision people will make in their lifetime. A real estate appraiser can provide you with an opinion of the current market value of your property. This information will help you to make an informed decision regarding the property.
An opinion of value is typically referred to as a real estate appraisal. The process required to provide an appraisal requires a thorough knowledge of market trends, economic conditions, location factors, and current real estate values.
If you are a buyer:
You want to be sure that you do not overpay for the property you are purchasing. If you require a financing in order to purchase the property, you should also secure an appraisal in order to confirm that the lender perceives the property to have the same value as you perceive. For this reason it is always good to get a real estate appraisal to know the most accurate value for the property.
If you are buying a property without the assistance of a real estate broker (often referred to a real estate agent or REALTOR®), it is important that you obtain a real estate appraisal. Without an appraisal, you do not know if you are overpaying for the property. Additionally, RECA requires real estate appraisers to carry professional liability insurance, which provides further protection to consumers.
Website-based opinions of value are not reliable. These automated valuation programs often produce inaccurate results, as they have limited information compared to the data required for an appraisal. Additionally, the automated valuation program cannot take into consideration subjective factors, such as property condition, land use, location factors, etc.
For information on how to choose a real estate appraiser click here.
If you are a seller:
If you want to be sure that you do not under estimate, or over estimate, the value of the property you are selling. If you are a seller, it is good practice to obtain a real estate appraisal before you put up your property for sale.
If you are selling a property without the assistance of a real estate broker (often referred to a real estate agent or REALTOR®), it is important that you obtain a real estate appraisal. Without an appraisal you do not know what price to ask for the property or how the price you may wish to ask relates to the property’s current market value.
Website-based opinions of value are not reliable. These automated valuation programs often produce inaccurate results, as they have limited information compared to the data required for an appraisal. Additionally, the automated valuation program cannot take into consideration subjective factors, such as property condition, land use, location factors, etc.
For information on how to choose a real estate appraiser click here.
Commercial Real Estate
If you are a business person wanting to buy, sell or finance/refinance a commercial property, you need reliable information in order to make an informed financial decision regarding the real estate assets. A real estate appraiser can provide you with an opinion of past, present or future value of the real estate assets. A real estate appraiser can provide you with the following services:
- Future values of the properties being built;
- Independent real estate valuation for investment decisions (i.e. financing, takeovers);
- Verification of damage claims;
- Independent real estate valuation for property tax assessments, capital gains or other taxes;
- Independent real estate valuation for compensation due to expropriation;
- Property management lease analysis;
- Consulting feasibility studies; and
- Best use studies.
Real estate appraisers may also provide your firm with an opinion of market value if your company accounts for properties using the fair value method under International Financial Reporting Standards (IFRS). For further information regarding real estate appraisal and IFRS, click here.
For information on how to choose a real estate appraiser click here.
For further information regarding the services of professional real estate appraisers, please click here (link to the ALIS site).
Mortgage Lenders
If you are a lender considering a loan application secured by real estate, an appraiser can provide you with the information you need to evaluate the real estate and make an informed decision regarding the loan. An appraiser can:
- Provide an independent opinion of value for the property being used as security;
- Provide information that indicates the potential for mortgage fraud, such as the following:
- The property was subject to a recent sale and price inflation;
- The seller is not residing in the property, it may be vacant or inhabited by tenants;
- The buyers maybe residing in the property already;
- The sellers, buyers or other professionals involved in the transaction may be attempting to place undue influence on the appraiser to arrive at a predetermined value, or for the appraiser not to report relevant information to the lender.
- Provide an independent assessment of the physical characteristics of the property, such as:
- Property condition
- Confirm the property characteristics
- Confirm developments and development or improvement characteristics
- Provide information on suspected environmental concerns, as mold or past grow-ops.
For information on how to choose a real estate appraiser click here.
Accountants
The International Financial Reporting Standards (IFRS) require the reporting and valuation of property. If you are performing work for an entity that accounts for real estate under the fair market value, real estate appraisers can assist you in determining the fair market value of property. While IFRS does not require the fair market value to be calculated by a real estate appraiser, it is advisable that all fair market evaluations be undertaken by real estate appraisers for the following reasons:
- Real estate appraisers are capable of meeting the IRFS’s Fair Market Valuation requirements. Real estate appraisers have access to lease and purchase contracts and have the expertise to make proper adjustments and to take into consideration differences related to the nature of the real estate, the condition and location of the real estate, contractual encumbrances, economic conditions and cash flows;
- While employees of a corporation can provide estimates or opinions of value without an authorization (licence) from RECA, the opinion of value can only be used internally and cannot be relied upon by third parties. If the opinion of value is to be relied upon by third parties, the opinion of value must be performed by a real estate appraiser licensed by RECA.
- If there was to be an issue associated with the fair market value of real estate accounted for or audited by you, your liability risk will likely increase as a real estate appraiser was not used. In Alberta only real estate appraisers are authorized to conduct fair market evaluations of real estate unless otherwise exempted.
For information on how to choose a real estate appraiser click here.
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