Toronto Real Estate Appraisals
It is ironic how a simple act can lead one down a new road in life. Around 1972 I was frustrated. I had a mortgage brokerage business and by law on any loan less than $40,000 we could not take a deposit toward our fees. $40,000 was a lot of money back then as houses were so much cheaper. My problem was simple, I would arrange a mortgage for someone and then at the last minute they would shop my commitment to save a few dollars and refuse to close on our deal. They had no deposit to lose and suing them for hundreds of dollars was not practical and they knew it. Not only was I out my commission I was stuck with legal fees and disbursements. I had to figure a way around this and legally. What I did was simple, I started charging appraisal fees which were not negated in the law. I had found a loophole.
From this, Lebow Appraisal Services was born. Eventually, people demanded that I produce written appraisals and then some people told friends about me and I started getting divorce work, estates, etc. Frankly I knew little of the profession and I was working out of the basement of my home but I was a trained REALTOR® and knew how to compare houses and back in the 1970s house prices made an appraisal much easier.
Well, demand grew, the appraisal fees became steady income and I decided to jump in, learn more and grow the business. It was great having a business where the phone rang for me instead of cold calling.
By the mid 1970s I was into commercial work for private lenders and eventually I joined the Appraisal Institute of Canada where I studied and learned a great deal. I was very lucky, I had wonderful, experienced mentors who gave so much of their time to me. They were seasoned appraisers who would review and critique my work. That was invaluable to me.
By the 1980s, the appraisal firm had become very well known and we were branching out and at our peak I had a staff of 33 from appraisers to clerical. We were computer pioneers getting our first computers in 1977 and then an entire UNIX network around 1980. We were doing 5,000 residential appraisals per year for mortgage lenders and hundreds of commercial properties. We were active in litigation support, estate planning, tax rollovers, divorce and obviously mortgage work.
In the last years of me being with my firm I was logging about 40,000 kms. per year driving across Ontario for my commercial clients or for residential litigation work and then flying across North America. We took on a major job in the United States of thousands of properties for a litigation matter. It was a very hectic professional lifestyle.
Around 2010 I was tired. I had been travelling too long, I felt that I wanted more than just appraisal as I wanted more involvement in deals, to create deals rather than just service them.
I made a decision, I sold my majority shares in the business to my associates and split the firm into a commercial and a residential division.
Today, Lois Hicks, AACI is the CEO of Lebow, Hicks Appraisal Services Inc. Under her direction she has undertaken major work across Ontario for all types of commercial properties and in some very complex situations. Lois is a highly regarded and respected elite expert witness in appraisal matters and has appeared in courts in Ontario on multiple occasions. She has been praised for her expertise by judges and lawyers. The firm is in excellent hands under Lois’s direction and drive.
“Your organization has been professional and efficient
in all dealing we have had with you and we look forward to a continued relationship.”
– President of one of Canada’s house builders
The residential division is Lebow, Hicks Residential Appraisal Services and is headed by Jason Lee, AACI who started working under the direction of Lois Hicks and has returned to be the partner-manager of the residential division.
And me? I may no longer be an active appraiser but I have over 4 decades of expertise to guide and to advise on matters when needed. Many of my real estate clients need appraisals and I ensure that my former firm is the appraisal firm of choice. Obviously I use my established skills with my selling and buying clients as an active REALTOR®.
As well, I remain active in real estate litigation matters relating to real estate agency and real estate stigma as an expert witness and my appraisal skills are necessary when I investigate and undertake my reports for the courts.
I am proud of having left a legacy as the name, Lebow, Hicks is well known and respected in the field of real estate valuation and notably under the direction of Lois Hicks.
For Commercial Appraisal Needs:
Lois Hicks, AACI
For Residential Appraisal Needs:
Jason Lee, AACI
For more information visit Lebow.com
What is the difference between a valuation by a Realtor versus an Appraiser?
People are surprised to learn that Ontario does not have licensing for appraisers. Anyone could basically call themselves a real estate appraiser and be in business but few would be recognized.
It takes years of hard study for an appraiser to achieve their designation. In Canada, the most recognized appraisal designations are from the Appraisal Institute of Canada (AIC) and include the AACI for commercial and residential work or the CRA solely for residential. As well, CNAREA, a smaller appraisal organization (add comma) has members across Canada. All members of appraisal organizations must have high education, ethical standards and errors and omissions insurance. Their annual dues and insurance costs are very high.
Appraisers are trained to be detailed, thorough and neutral. They have one service, appraisal. Their services are not governed by the outcome.
Realtors may give opinions but many courts want certified appraisals by appraisers as does Canada Revenue and other agencies. Realtors may have ulterior motives, such was wanting the listing which does not put them into a neutral position. As well, few Realtors are trained in appraisal save for cursory courses and their errors and omissions insurance limits the work that they can undertake.
In simple terms, Realtors give opinions, appraisers give certified valuations. Note, some Realtors are also appraisers and are members of the recognized appraisal associations.
What to look for in hiring an appraiser?
When hiring any professional or tradesperson, personal recommendations are best. Go online, check the appraiser on Google. Are there any negative comments? Is there any mention of them at all outside of a professional listing? If the purpose is litigation go to https://www.canlii.org/en/ a legal site to search their name and see what judges have said about their evidence.
If yours is a specialized matter such as tax issues, litigation, stigma, etc. ask the appraiser about their experience in that field, have they testified in court on these issues, would they testify if they had to, and do they have references from either past clients or lawyers or accountants.
Note, in the residential field, a good majority of the appraisers solely do basic mortgage work which consists of filling in forms in the quickest time. They are not thorough and most will not attend court, a tax office, etc. Vet your appraiser carefully, they are not all equal.
How are appraisal fees set?
By degree. The degree of ease or difficulty establishes the fee. If for a house and there have been many similar houses sold recently, the fee is as at base pricing but should the house be unusual, should there be limited comparable sales or worse, none, the fee will increase and substantially.
For commercial work, most firms have their base fee but again as issues get more complex the fees must increase. Commercial reports are based on the appraiser’s estimate of how many hours it may take to complete the assignment. For very complex assignments, the appraiser could be involved for years if it is a major litigation or tax issue. There is a great difference between appraising a small store with an apartment above to appraising entire blocks of buildings, highrises, large land holdings and other more complex matters.
Litigation files require special skills, many hours of research, review and meetings with clients, lawyers, other professionals and the hours to be spent upfront are difficult to estimate. Litigation appraisal work is not inexpensive.
Note: The answers herein are not to be considered independent legal advice or any other advice outside of the expertise of real estate transactions solely. Any party who wants to consider an answer herein should seek independent legal or other professional advice before proceeding.
Barry Knows Real Estate
Get in touch with Barry for answers to all your Toronto real estate questions.