As defined by the Appraisal Institute of Canada.

An appraisal is an estimate of value. It can be provided orally but it is usually a written statement of market value, or value for loan purposes, or value as described by the appraiser of an adequately described property on a specific date.  

As defined by the Uniform Standard of Professional Appraisal Practice (USPAP).

The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: the buyer and seller are typically motivated; both parties are well informed or well advised and acting in what they consider their best interests; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash in Canadian dollars or in terms of financial arrangements comparable thereto; and the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

Appraisers estimate market value by measuring the impact of market forces. Appraisers do not determine value, courts determine value in matters of dispute. In estimating market value the appraiser must consider many principles including supply and demand forces, competition, law of substitution, opportunity cost, conformity, highest and best use and marginal productivity among others. The appraiser will use the Direct Comparison Aproach to value which looks at the differences in the legal, physical, locational and economic characteristics of comparable sales and listings, and more closely on differences in the property rights, the sale dates, the motivation of the parties and the financing involved.

Appraisals may be required for many purposes including but not limited to mortgage financing, buying/selling, disputes, expropriation, tax purposes and estate purposes.  

Assessed Value refers to the value for tax roll purposes. Both the Assessed Value and the Appraised Value are based on Market Value in B.C. The BCA value is the market value estimated as of July 1st of the previous year and a current market appraisal is based on the current date. An Assessment is often appraised on a bulk basis, lumping many similar homes in the same neighbourhood together. The Assessor may also not be aware of any updates or renovations that a home may have, whereas an Appraisal would take both those into account.

Economic Life is the total period of time which the improvements (house/buildings) contribute to the overall property value. The total Economic Life of a typical BC home is generally 65 years. Economic life and physical life can differ widely and physical life usually exceeds Economic Life. Renovations and updates can increase a property's physical and Economic Life and poor maintenance can shorten it. Increases in land value can also have a negative impact on remaining economic life as older homes are torn down to make way for new ones, it makes less "economic" sense to keep the older one standing.

Remaining Economic Life (REL) is the estimated time period which the improvements continue to contribute to property value. An appraiser estimates REL in part by interpreting the economic conditions, attitudes and reactions of buyers in the market.

The Remaining Economic Life is calculated by subtracting the Effective Age from the Total Economic Life.

Economic Life - Effective Age = Remaining Economic Life

For example:

A 40 year old home that has had substantial renovations may have an effective age of 30 years.

65 years – 30 years = 35 years Remaining Economic Life (REL)

The Appraiser performs an appraisal for his/her Client and the Client is any party for whom the appraiser performs a service. This is usually the person who engages the Appraiser to complete the assignment and this may or may not be the person who actually pays for the appraisal. Often the Lender /Broker will order the appraisal from the Appraiser but the fee is paid by the home owner and in this case the Lender/Broker is the Client.