Procedures

Members of the Appraisal Institute of Canada who have met all of the requirements for the use of the Certified Residential Appraiser (CRA) or Accredited Appraiser Canadian Institute (AACI) must be interviewed by the NBAREA/AEIN-B Committee of Examiners.  The Association provides this service pursuant to its Affiliation Agreement with the AIC.

Upon submission of the following, your interview with the Committee of Examiners will be scheduled.

Please be advised that the interview is available in either official language. Please indicate your preference on the Application for Designation included in this section.

• Completed Application for Designation
• Three written characterreferences
• Mentor & Mentee Reports
• Application Fee in the amount of ($271.41 +HST)
• Proof of completion of all education requirements for designation
• Proof of insurance

An interview with the Committee is your opportunity to demonstrate competence in three basic areas;

Code of Ethics & CUSPAP;

Professionalism and competence under actual working conditions with a peer review of your work product;

Knowledge and familiarity with current appraisal theory.

It is recommended that you review the Code of Ethics and CUSPAP.The Committee is not looking for memorization of the texts, but rather a thorough understanding of areas which specifically relate to appraisal reporting requirements and the ethical conduct of members.

Please come prepared to the interview with your working file for each appraisal and bring any other supportive material relied upon in the valuation. You may be asked to support any relevant portion of the appraisal.

It is suggested that prior to the interview you carefully review all submitted product and anticipate questioning in the area of methodology, ie. Cost Approach, Income Approach, (where appropriate) and Direct Comparison Approach.  You should also review your appraisal methodology applied to the final estimate of value. The careful selection of work and adequate preparation will greatly improve the success of your interview with the Committee.

INTERVIEW OUTLINE

CRA:

1. Appraisal Experience/Background.
2. Code of Professional Ethics, Regulation No. 1.
   1. Keep report for 7 years.
   2. Others
3. Standards of Professional Practice (CUSPAP).
   1. Types of reports.
   2. Types of reporting.
   3. Purpose and intended use.
   4. Scope of appraisal.
   5. Certification.
   6. Others.
4. Inspection of Subject Property.
5. Analysis of Neighbourhood and Community.
   1. Residential.
6. Highest and Best Use Principle:
   1. Define.
   2. Other principles considered:
      1. Anticipation.
      2. Balance.
      3. Contribution and Competition.
      4. Supply and Demand.
      5. Surplus productivity.
   3. Problem:
      1. As if vacant.
      2. As improved.
7. Appraisal Theory:
   1. Cost Approach:
      1. Steps.
      2. Replacement vs. Reproduction Cost.
      3. Source of Reproduction Cost.
      4. Type of depreciation and measurement.
         1. Physical
         2. Functional
         3. External
   2. Direct Comparison Approach:
      1. Steps.
      2. Source of comparables.
      3. Adjustments.
      4. Unit of comparisons.
   3. Income Approach:
      1. Steps.
      2. Source of comparable Gross Incomes.
      3. Source of comparable vacancy rates.
      4. Source of comparable Expenses.
      5. Source of comparable Capitalization Rates.
      6. Basic Valuation Model (V=I/R)
      7. Derivation of Overall Rate.
8. Reconciliation of value indications and final estimate of value.
9. Addenda.
   1. Comparable Sales, Community, Neighbourhood, and Zoning Maps.
   2. Floor and Plot Plans.
   3. By-Law.
   4. Deed.
   5. Others.
10. Others:
    1. Purpose and function of appraisal.
    2. Assessment and taxes.
    3. Zoning/Regulation.
    4. Limiting Conditions.

AACI:

1. See CRA
2. Analysis of Neighbourhood and Community.
   1. Multi-residential.
   2. Commercial.
   3. Industrial.
3. Income Approach:
   1. Lease analysis and types.
   2. Contract rent vs Market rent.
   3. Leased fee interest vs Leasehold interest.
   4. Derivation of Potential Gross Income.
   5. Derivation of Other Income.
   6. Derivation of Vacancy/Bad Debt.
   7. Derivation of Effective Gross Income.
   8. Analysis of expenses.
   9. Other expenses:
      1. Management Fee.
      2. Interest (Operation Capital).
      3. Excluded Items.
      4. Others.
   10. Derivation of Net Operating Income.
   11. Methods of Capitalization:
       1. Capitalization in perpetuity.
       2. Direct Capitalization.
       3. Annuity Capitalization.
       4. Mortgage-Equity Capitalization:
          1. Cash Flow Method.
          2. Band of Investment Method.
   12. Capitalization Rates:
       1. Discount (or Interest) Rate.
       2. Recapture Rate.
       3. Overall Capitalization Rate.
       4. Building Capitalization Rate.
       5. Composite Discount (or Interest) Rate.
       6. Capitalization Factor.
       7. Equity Dividend Rate.
   13. Discounted Cash Flow Method:
       1. Define.
       2. Estimate of reversion.
       3. Internal Rate of Return.
       4. Net Present Value.
       5. Profitability Index.

NOTE: This outline is a guide only, interview may cover other items and topics.