We read Mike Holmes' "If you think appraiser is wrong, say so," with some interest.
While the column does not indicate whether the appraiser was a designated member of a particular appraisal association, we would like to provide context as it relates to the Appraisal Institute of Canada.
Founded in 1938, the AIC is the premier real property valuation association in Canada. It is a self-regulating professional organization with more than 4,700 active and practising members across the country.
The AIC grants the distinguished Accredited Appraiser Canadian Institute and Canadian Residential Appraiser designations to individuals across Canada and around the world. These designations recognize highly qualified individuals who have completed the AIC's rigorous curriculum, experience and examination requirements.
Holmes' column criticizes the appraiser without having seen the house, and goes on to say that the "appraiser the bank hired couldn't support the loan."
The appraiser's professional and ethical responsibility is to provide an independent and unbiased assessment of the value of the subject property. While the homeowners might be disappointed in the outcome, it does not mean the appraiser was wrong.
The valuation process takes into account elements such as the physical characteristics of the dwelling, interior and exterior finishes and systems and the quality of the improvements, as well as any deficiencies or impairments. Market conditions and comparable sales are two key factors inherent to the process. The valuation of collateral is just one step in the loan process. All Canadian federally regulated and non-federally regulated financial institutions have specific guidelines and policies for underwriting loans which include, but are not limited to, the borrower's ability to service their debts and to repay the loan; a thorough understanding of the market conditions; and the value of the collateral.
A great many of our members hold a business degree or a degree with a business focus - others have supplemented a general degree with experience in banking, real estate or other areas. The AIC curriculum is delivered by the University of British Columbia and includes studies in economics, finance and statistics, to name a few.
Taken together, the experience and studies help to develop business, analytical and critical thinking skills - key elements to succeed as a real estate appraiser.
Contrary to Holmes' assertions, construction skills and knowledge are fundamental to the training AIC members receive and our Continuing Professional Development programs regularly focus on new and emerging construction practices. Members also rely on the expertise of industry professionals where building characteristics are more complex.
As a self-regulating body, the AIC has established ethics and standards to help ensure members fulfil their obligations to their clients and to ensure they maintain their skills. In addition to the AIC's Standards of Professional Appraisal Practice, in some provinces, AIC members must also adhere to their respective provincial licensing requirements.
The AIC encourages members of the public to engage real estate appraisers that are members of a strong professional association such as the Appraisal Institute of Canada.
Keith Lancastle is chief executive officer of the Appraisal Institute of Canada, www.aicanada.ca.
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