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The Terms of Reference of the appraisal assignment should be in writing and agreed to by the parties prior to the assignment to avoid any misunderstanding or additional work to amend the valuation report. The typical terms and conditions that should be taken into consideration when hiring a designated appraiser include the following:

  • Purpose of the Appraisal Assignment: Outlines that the purpose of the appraisal is to establish a market value, and therefore should include the relevant definition of value.
  • Intended Use of the Appraisal Report: Identifies what you intend to use the valuation report for (e.g. mortgage financing, refinancing). This allows the designated appraiser to confirm the work that will be required and provide any specialized advice necessary to support your intended use.
  • Intended User(s) of the Appraisal Report: Defines to whom the designated member can expect to provide a copy of the report.
  • Appraiser’s Client: The Client is not necessarily the one who pays for the report but rather the one ordering the appraisal report. Anyone wishing to obtain a copy of the appraisal report must contact the appraiser’s client. The appraiser can provide a copy of the report to a homeowner or a third party provided that the appraiser obtains his or her client’s permission in writing.
  • Type of Appraisal Report: The type of property being appraised and the complexity of the appraisal assignment will typically determine the type of report that will be required as well as the corresponding appraisal fee.
    • Form reports are typical in residential valuations.
    • Short narrative reports set out the key salient facts and conclusions.
    • Full narrative reports set out in greater detail the research and conclusions.
  • Effective Date of the Appraisal Report: This can be the date of inspection or any other reasonable date in the circumstances. The date can be current, past (“retrospective”) or future (“prospective”).
  • Assumptions Made in the Analysis and Limiting Conditions that may Impact the Value: Assumptions and Limiting Conditions should be discussed in advance and confirmed in writing by the appraiser as being appropriate for the valuation.
  • Appraisal Fee: An agreement on the fee charged for completing the appraisal assignment and identification of the party responsible for making the payment should be negotiated prior to starting the appraisal assignment. As mentioned above, the fee depends on the complexity of the appraisal assignment.
  • Conflict of Interest: The appraiser must disclose any conflict prior to taking on an assignment or as soon as uncovered once the appraisal assignment has started. Depending on the nature of the conflict, the appraiser may need to decline an appraisal assignment.
  • Due Date: This is the date that the final valuation report is expected to be delivered.
  • Appraiser’s Certification: This is the designated member’s customary and usual certification at the end of an appraisal report which is the appraiser’s acceptance of responsibility for the appraisal and the contents of the appraisal report.