Central
Ontario Appraisals (Aurora) Inc.
Suite 213, 126 Wellington Street West, Aurora, ON. L4G 2N9
Tel: (905) 503-1939 or (800) 619-8258
Fax: (905) 503-1937
Why would I need an appraisal?
What is an appraisal?
Who is a qualified real estate appraiser?
Why should I choose a member of the Appraisal Institute to conduct my appraisal?
Why would I need an appraisal?
What is an appraisal?
The Direct Comparison Approach
The Cost Approach
The Income Approach
Who is a qualified real estate appraiser?
The AACI designation denotes fully accredited membership and indicates competence in valuing a wide range of real property.
The CRA designation denotes individuals qualified in the valuation of individual, undeveloped residential dwelling sites
and dwellings containing not more than four self-contained housing units.
All members of the Appraisal Institute of Canada are required to recertify every five years.
Why should I choose a member of the Appraisal Institute to conduct my appraisal?
There are a number of reasons or situations in which you may need an appraisal. These include:
An appraisal is an independent valuation of a property for a specific purpose and at a
specific point in time. The valuation is determined by using the most appropriate method of valuation.
The three common methods of valuation are:
The basic premise of the Direct Comparison Approach is that the value of a property is
the price paid for comparable properties which have recently sold. The method is to
discover sales of properties which can be reasonably used to estimate subject value on
a comparative basis. Since sales of properties which are exactly similar to the subject
property are seldom found, it is usually necessary to apply a process of adjustment to the
selling prices of properties used for comparative purposes in order to reflect the differences
with the subject property.
The method of the Cost Approach is to add the value of the land to the depreciated
replacement cost of the buildings and other site improvements. Although the estimate of
land value can usually be supported by market data, the estimate of depreciation can be
difficult to support, particularly in the case of older buildings. This test of value is
usually utilized for special purpose properties (e.g. church, hospital, etc.), where valuation
by the other recognized methods is not possible, or may be used in rising markets to serve
as a check for the more reliable tests.
This is an appropriate test for a property capable of producing rental income, since the
method considers that capability. The relationship between net income and value is established
by a capitalization process. Annual income is first calculated from actual rent or from
a projection based on that rent which the property could expect to obtain in the open
market. Deductions are then taken for those operating expenses, if any, paid by the owner.
Allowances for possible vacancy loss and for property management charges are also deducted.
The resulting net income before debt service is then capitalized at an appropriate rate.
The Appraisal Institute of Canada requires its members to obtain either an AACI or CRA designation. Both designations
require that stringent education and experience requirements have been met, and that job performance is according to the
Code of Ethics and Rules of Professional Practice established by the Appraisal Institute.
A designated member of the Appraisal Institute has had years of education and training. It�s their job to keep up to date
with changes in market trends and laws that affect real estate values. Combining their knowledge and expertise with a thorough
investigation of the property and the area, an appraiser will give you an independent, professional opinion that you can
trust. By hiring an Appraisal Institute member to conduct your appraisal you will be hiring:
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