Do you know the market value of your property? That information can be extremely useful, and not only if you decide to sell your home! The best way to get an accurate assessment is to ask for a property valuation.
Whom to trust
A property valuation must be conducted with full objectivity, free of emotional attachment and financial interest. Entrusting the job to an appraiser recognized by the Ordre des évaluateurs agréés du Québec (OEAQ) or one who is a member of a professional association of property evaluators will guarantee an impartial, neutral opinion on a property.
The OEAQ’s mission, like that of any professional order in Quebec, is to protect the public. It assures the quality of the professional acts performed by its members, by:
- guaranteeing their technical competency;
- supervising their work by setting standards that govern valuation methods and techniques as well as the nature, content and means of communicating reports;
- monitoring their practice (among other things, handling complaints from members of the public); and
- certifying that they hold valid professional liability insurance.
To find out whether an appraiser you are thinking of hiring is a member in good standing of the OEAQ or has ever been subject to a disciplinary sanction, visit the Order’s website, www.oeaq.qc.ca, or call 514 281-9888 or 1 800 982-5387 (toll-free).
The technical competency of appraisers with the title Accredited Appraiser Canadian Institute (AACI), awarded by the Appraisal Institute of Canada, is deemed equivalent by the OEAQ. This is not true, however, for Canadian Residential Appraiser (CRA) members of that same institute (which is a private organization).
Lastly, note that while the professional title évaluateur agréé (accredited appraiser) is reserved for members of the OEAQ, in Quebec anybody can call themselves an appraiser and produce property valuations. If you decide to deal with an appraiser who is not accredited by the OEAQ, you should at the very least check that they have professional liability insurance. It’s also important to hire someone who has no interest in the property involved, to ensure you are getting a completely objective opinion as to its value.
What to expect
If you decide to have your property assessed, here is an overview of the main steps in the process.
1. The appraiser or an associate visits your property to inspect the dimensions of the house and land, take photos, and study the general condition of the property, talking to you, if possible, to complete this information-gathering step. The inspection visit usually takes between 45 and 60 minutes.
2. Based on the information gathered, the appraiser establishes the value of your property, taking into account its location, the area of the lot, as well as the building’s dimensions, age, condition, features, and so on.
3. The appraiser produces a written report. It may be abridged or detailed, depending on the needs. An abridged report is a summary of the valuation, and is most often produced using a form with checkboxes. The detailed or “narrative” report includes a comprehensive description of the house. Whether you order a detailed or abridged report, it must contain 12 specific items, which include:
- physical and legal information about the property;
- the purpose of the valuation;
- a definition of the expected value;
- the date the valuation was performed;
- an explanation of the appraiser’s reservations, which restrict the scope of the valuation;
- the appraiser’s signature.
A property valuation for a single-family home usually costs $500 or more.
When is it worth it to get a valuation?
Besides wanting to set a selling price for your home, there can be many other reasons for you to request a property valuation. These may include:
- establishing the partitioning of family patrimony in case of death or divorce;
- settling a dispute with an insurer over the amount of coverage necessary or the amount of a payout for damages;
- applying for a mortgage loan or financing to have renovation or construction work done; or
- contesting your home’s value on the municipal property tax roll or a compensation amount offered for expropriation.
In the case of partitioning of patrimony or an expropriation, hiring an accredited appraiser is a must.
If the reason involves home insurance or property taxes, you must carefully assess the amount of the expected financial gain before deciding to spend money on a formal property valuation.
You should also keep in mind that when you apply for a mortgage loan, the financial institution involved usually hires its own accredited appraiser. If the lender agrees, however, it is entirely in your interest to deal with an appraiser of your choice. Why? Because you will have to pay for the valuation anyway, and if you hire your own appraiser, you can keep the report—which may be a substantial advantage if your loan application is rejected and you have to knock on the door of another financial institution.
Our thanks to Denis Aubert, President of Aubert, Sylvain et associés Inc., and Hélène St-Denis, President of Bourassa et Jodoin Inc., for their contributions to this instalment of Tips & Tricks. Their valuation firms are members of CAA-Quebec’s Network of Approved Residential Suppliers.
The Appraisal Institute of Canada (AIC)
In Quebec, property valuation is not a field of practice reserved exclusively for members of the Ordre des évaluateurs agréés du Québec (OEAQ); it includes other professionals, such as members of the Appraisal Institute of Canada (AIC).
The AIC, a private association, is present across Canada and has about 200 members in Quebec. Those members are not subject to Quebec’s Professional Code. Administered by the Office des professions du Québec, the Code provides the framework for professional orders in the province, ensuring that each of them works to protect the public interest by guaranteeing the quality of the professional acts performed by their members.
Though it is not subject to the Code, the AIC does have an organizational structure similar to that of the OEAQ (and operates in a self-regulating manner). The AIC ensures that its members:
- “Maintain the highest level of integrity and professionalism;
- “Engage in conduct that will instil confidence and protect the public interest;
- “Provide quality services within their areas of competence; and,
- Commit themselves to principles that reflect high standards of professionalism.”
AIC members also commit to taking continuous training and skills-upgrading courses.
In addition, note that, with an eye to developing a broader customer base, including in markets outside Quebec, many OEAQ members are also AIC members.