An appraisal is an estimate of the value of real property determined by someone who is qualified. It is an opinion or an evaluation of a property’s value.How is this qualification determined? There are basically two different trade organizations in Canada: The Appraisal Institute of Canada and the Canadian National Association of Real Estate Appraisers. Both organizations uphold rigorous standards that their members must adhere to. Designations are based on continuing education requirements, ethical standards, and grievance and enforcement procedures.In the past, most Lenders required a property appraisal for a new mortgage loan. These appraisals usually took place after the contract between buyer and seller had been finalized and their purpose was to verify the contract price, or risk, to the Lender. Presently, Lenders do not always require an actual appraisal for a property as there are now computer data bases that can give a general idea about what a property might be worth in a particular neighborhood and this combined with Mortgage Insurance to the Lender’s advantage lowers their risk. Of course not all properties can be approved through this process so there are still some appraisals required for this purpose, especially for unique properties, rural properties or properties that have had recent improvement.Appraisals are also performed to determine a reasonable offering price in a sale, to determine a reasonable asking price in the listing of a property “by owner”, property value for estate tax purposes, assessment appeals, foreclosure purposes, marriage settlement, estate settlement and for insurance and tax purposes.The Appraisal Report provides the details and results of the procedure. Reports are usually presented written in a narrative, letter or form style. Residential appraisals are usually produced on a standard form that has been approved by the designating organization. This form meets the requirements of most lenders. The property and neighborhood are described in one section and in another section the valuation procedure is summarized including explanations as to why certain conclusions had been reached. Addenda for Photographs and Maps are also attached.An appraisal should be ordered when you need an accurate evaluation of a property. A realtor’s opinion may not accurately reflect the true market price. It is important to use a well-qualified and experienced appraiser. With the practice of most Financial institutions now using appraisal management companies to order their appraisals, there are now a number of “discount” appraisers doing a lot of this work. The work “discount” means what it says and the adage is as true in this respect as in any, “you get what you pay for”. These companies and individuals are also trying to get business from the main stream of appraisal work that has been mentioned above, as they find it hard to support their businesses on the income from appraisal management companies. Be careful or you will get the same quality of work that is being produced at a discount, and they may even charge you full price. Use an appraiser that has undertakes numerous different assignments and does not primarily work for appraisal management companies.