Home appraisal glossary

Plain-English definitions of the terms you'll see in Canadian residential appraisal reports and conversations.

AACI: Accredited Appraiser Canadian Institute — the AIC's senior designation covering all property types, including complex residential, commercial, and litigation work.
CRA: Canadian Residential Appraiser — the AIC's residential-only designation. Both AACI and CRA members are bound by CUSPAP.
AIC: Appraisal Institute of Canada — the national professional body that grants AACI and CRA designations and enforces CUSPAP.
CUSPAP: Canadian Uniform Standards of Professional Appraisal Practice — the standards AIC members must follow.
AVM: Automated Valuation Model — a computer-generated value estimate. Useful for screening; rarely accepted for legal, estate, tax, or formal lender work.
CMA: Comparative Market Analysis — a realtor's marketing opinion of value. Not a regulated appraisal.
Effective date: The date as of which value is being estimated. For estate work it's often the date of death; for litigation it can be the date of separation, breach, or trial.
Intended user: The party who relies on the appraisal — typically a lender, lawyer, accountant, insurer, or the court.
Intended use: The purpose of the report — mortgage, refinance, divorce, estate, CRA, tax appeal, insurance, etc.
Highest and best use: The reasonably probable and legal use of a property that is physically possible, appropriately supported, financially feasible, and results in the highest value.
Narrative report: A long-form appraisal report typically used for legal, estate, litigation, and complex assignments.
Form report: A standardized short-form report typically used for mortgage underwriting.
Retrospective appraisal: An appraisal with an effective date in the past — common for estate, CRA, and litigation work.
Reconsideration of value (ROV): A formal request asking the appraiser or lender to reconsider the value conclusion, usually with new comparable evidence.
Drive-by appraisal: An exterior-only appraisal without interior inspection. Faster and cheaper, but less reliable.
Cost approach: A valuation method that estimates the cost to rebuild less depreciation, plus land. Common for insurance and unique properties.
Income approach: A valuation method that derives value from a property's net operating income. Used for income-producing residential property.
Direct comparison approach: The most common residential valuation method — comparing the subject property to recent sales of similar properties.
Reconciliation: Weighing different lines of valuation evidence to arrive at a single defensible opinion of value.