This is a brief overview to help provide an understanding of the difference between the Canadian National Association of Real Estate Appraisers (CNAREA) and the Appraisal Institute of Canada (AIC).
I am not acting in any capacity to represent either association for the purpose of this post, therefore, please consult either association directly before relying on any information provided herein.
I will also take this opportunity to mention the difference between Fee Appraisals and Non-Fee Appraisals. This post mainly focuses on fee appraisals, which, in general terms, is when an appraiser works on a specific assignment basis. That could be a single-family residence, a 4-unit multi-family, etc. For some commercial appraisals, the assignment could be significantly broader in scope, but the nature of the contract required to complete the assignment is the basis for determining the appraiser’s position. Non-fee appraisers may be staff appraisers working as employees for a lender, insurer or some other institution, such as a tax assessment authority. In any case, an appraiser could be a Fee Appraiser and a Non-Fee appraiser. For example, an appraiser could work as a non-fee appraiser for an employer and perform Fee Appraisal assignments for other clients, assuming no conflicts of interest arise. In many instances, it is the capacity in which an appraiser represents themselves and acts which determines their position.
CNAREA and AIC have appraisers working in both capacities. The rules that apply to Fee and Non-Fee appraisers can differ, but in general, both would be treated similarly by both associations.
CNAREA and AIC are membership associations. Each offer published standards and bylaws that provide direction for members to ensure they remain compliant with the intentions of their associations. These standards are also available to the general public, including industry partners, as a statement of what should be expected of the appraiser professional. These are considered to be minimum standards. Together with these standards, association bylaws, mentorship, the principles of reasonable peers actions, and overall engagement of the profession, the aim is to strive for the highest standards considered reasonably attainable.
Most professions will have standards specific to their profession. These types of standards are generally referred to as professional standards of practice.
The Uniform Standards of Profesional Appraisal Practice (USPAP) is one of North America’s most widely accepted standards. USPAP was formed after the S&L Crisis and formalized in 1987. You can read more about that HERE.
Up until 2001, Both CNAREA and AIC utilized USPAP. However, AIC determined that due to ongoing interventions from US regulators in the development of USPAP, their members, clients, and industry stakeholders could be better served by a specific Canadian standard CUSPAP. You can read a bit more about that HERE.
There are fundamental differences to each of the standards. The AIC’s CUSPAP standards avoid some of the language specific to US regulations and are contained within a single document. USPAP is intentionally concise but accompanied by a significant published body of interpretations with hundreds of Advisory Opinions and Q&A provided as a compendium now referred to as the Guidance Reference Manual (GRM), which aims to increase transparency and minimize misinterpretation or conflicting interpretations. To give some idea, the 2024 CUSPAP is about 74 pages total. While the 2024 USPAP is 63 pages but the GRM is 358 pages. Quantity does not mean quality, but it gives an idea of the level of content.
The AIC requires a university entrance level education to become a member and take their courses. CNAREA focuses more on college entrance education level and trades style approach to mentorship with professional educational applications and in-field training.
AIC is an older association with more established roots in Canada, and all Canadian institutional clients or lenders generally accept its appraisers based on that accreditation alone.
CNAREA has continued to gain significant traction and services all of the major lenders and many other institutional clients.
In all cases, the real estate appraisal profession is very diverse for either membership, with a wide variety of markets and property types. The expertise required to be proficient in even one market can be significant. Much of that expertise is gained through ongoing analysis and developing methodologies that are most appropriate for the market.
If you are looking for other criteria to help choose an appraiser, look for references from trusted sources. Make a list of questions that you might have. A good appraiser will generally be happy to answer your questions and share some of their knowledge. For obvious reasons, they may tend to be broad in answering questions specific to your assignment, but there is almost always a good level of confidence that can come from a short conversation.
Ideally, the appraiser viewing your property will also complete the analysis and sign the report as the appraiser, even if there may also be a co-signing supervisor or other accredited appraiser who must also be qualified to sign reports. There are certain circumstances, typically only on low-risk files, where a third party may be involved as a property data collector however, in Canada, that is generally not an accepted practice.
Is your property or its market unique, and how is that distinction made? Many properties are unique. In the lending space, most major lenders, particularly in first-position mortgages, if the lender is using an appraiser, it is probably because the computer-generated value models, often referred to as AVMs, could not provide a reliable value or produced a value that did not match some other measure of market value, such as the sale price or compared against other models where the results were significantly different. This often indicates that the property or market may have unique characteristics or lack consistent data, requiring a more advanced analysis.
For non-lender assignments such as estate, probate, divorce or other litigious matters, ensure your chosen appraiser has direct experience analyzing reasonably competitive properties in the market. Ensure they are prepared to spend the necessary time to provide sufficient analysis to present a conclusion of value with defensible evidence beyond just unsupported statements based on the appraiser’s representations of their own expertise. Most experts in real estate valuation will rely on the credibility of their analysis and reporting, not just their designation or years of experience. While those factors can certainly provide additional credibility, they should not be taken at face value alone.
CNAREA and AIC each have designations to signify the level and type of accreditation for their appraisers. Both associations use the Candidate level description to identify appraisers who are registered members, not yet qualified to sign reports without the oversight of an appropriately designated co-signing supervisory appraiser. The supervisor must generally be considered competent to complete reports in that specific market, in addition to qualifications to sign for a candidate.
CNAREA offers the (DAR) Designated Appraiser Residential and (DAC) Designated Appraiser Commercial. These designations allow the designated appraiser to have only one registered candidate. The Certified Appraisal Reviewer™ (no acronym) is an additional specific designation that qualifies the CNAREA appraiser to co-sign for up to 4 candidates in addition to reviewing all other types of reports, including other designated appraisers’, reports within the reviewer’s area of expertise.
The AIC allows either the CRA or AACI designation to co-sign for up to 4 candidates, without any specific designation like CNAREA, and up to 8, depending on the candidates’ specific minimum education and experience levels.
There are many additional bylaws and guidelines provided to both CNAREA and AIC members that help provide guidance on best practices for professional conduct.
No matter the appraiser you choose, ensure they are accredited by either association and qualified by their designations and market-specific experience.