Book 1 - Appraisal Institute of Canada

use (not so scary) statistics to analyze dozensof sales to consider the range, probability andmargin of error. An Automated Valuation Model(AVM) is no substitute for the experience requiredto interpret the market, but is a useful techniqueto assist the appraiser in analyzing appropriateadjustments. In larger cities and homogenousneighbourhoods, we have little defence in claimingthat relevant information is unavailable.Appraisers know that, on occasion, makingparticular adjustments can be difficult. To determinea site size adjustment is simple if sufficientvacant land sales exist, yet developing valueadjustments for condition, landscaping, influencesor market appeal is far more complex. Werecognize the principles are similar and it remainsour responsibility to measure the market carefullyto seek evidence on both macro and micro levelsto develop reasonable adjustments. Accordingto the Standards, the appraiser must describeand analyze all data relevant to the assignmentas well as detail the reasoning supporting theanalyses, opinions and conclusions of eachvaluation approach. (CUSPAP Rules 6.2.15. and6.2.18) Appraisal practice affirms that we do notmake adjustments without supporting marketevidence. If no sales are available, it calls fordiscretion based on experience, which should bebased on historical market data. With adjustmentsfounded on gut feeling, how do you really“just know?”Rather than relying heavily on personal experience,one of the best ways to ensure consistentand accurate appraisal adjustments is to develop apaired sales database. As you root out similar sales,take an extra moment to note differences and filethe information under the appropriate category.This will assist you in determining the range forfuture adjustments. If a client, lawyer or member ofthe Investigating Committee is concerned that anadjustment is unfounded, you are well-positionedto justify your adjustment process.Finally, in applying your adjustments, ensurethey are reasonable and consistent. In manycases, appraisers have applied contradictoryadjustments in different reports or, even worse,within the same report. If you havedeveloped a size adjustment, ensureit is applied similarly for all thecomparables, unless there is a validreason to depart from a consistentapplication.In the appraisal profession,our integrity is anchoredin due diligence. EvenLeonardo da Vinci,who was bothartist andscientist,believedthat a paintermust know notjust the rules of perspective,but all the laws of nature. So too appraisersmust adhere to professional standards. A moreconscientious approach in establishing accurateadjustments and cautiously applyingour subjective skills will build trust andfurther credibility of our profession....Nevertheless, their judgements must be exercised within acceptable standards of skill and expertise, and be based on rational assumptions.– The Honourable Madam Justice Neilson, Supreme Court of British ColumbiaInvestigating CommitteeSheldon Rajesky, AACI, P. App – Co-ChairDarrell Thorvaldson, AACI, P. App – Co-ChairDoyle Childs, AACI, P. AppGerry Gehlen, AACI, P. AppStan Jugovic, AACI, P. AppMike Schulkowsky, AACI, P. AppPaul Beckwith, AACI, P.AppVanit Kumar, CRADan Brewer, AACI, P.AppDeanna Halladay, CRATo contact this committee, email:investigating@aicanada.caclick here to return to table of contentsCanadian Property Valuation Volume 54 | book 1 | 2010 Évaluation Immobilière au Canada 25