Lenders require more than an estimated property value to advance financing. They need an independent, well-supported valuation that can withstand scrutiny from their credit committee. A professional appraisal provides this assurance, establishing a credible basis for lending decisions.
As a critical component of the financing process, the appraisal can also be a significant factor in determining how quickly a transaction proceeds.
Three things, and a file stalls when any one of them is missing.
Independence. The appraiser cannot have an interest in the transaction. That is why a value supplied by the party who wants the loan is rarely accepted on its own.
A defined basis of value. Market value, as of a stated effective date, with the approach used set out in full. A number with no reasoning behind it cannot be reviewed.
A recognised standard. Reports written to CUSPAP, the Canadian Uniform Standards of Professional Appraisal Practice, by an appraiser holding a designation from the Appraisal Institute of Canada. Our appraisers hold AACI and CRA designations.
One thing worth understanding before you start. Lenders size the loan against the appraised value, not against the price you agreed. If the appraisal comes in below the purchase price, the shortfall comes out of your down payment, not the lender’s advance.
The word appraisal covers several different pieces of work. What the lender actually needs depends on what is being financed.
| Purchase or refinance | Construction and draw financing | Multi-unit residential | Farm and agricultural | |
|---|---|---|---|---|
| What the lender is testing | Whether the security supports the loan today | Whether the work completed supports the next advance | Whether the building's income supports the debt | Whether land, buildings and production together support the loan |
| Basis of value | Market value as of the effective date | Value as of each inspection stage, against the approved plans | Income approach, using market rents, vacancy and capitalisation evidence | Land, improvements, water rights and production capacity assessed together |
| Typical properties | Office, retail, industrial, mixed use, investment property | Ground-up builds, additions, major renovations | Apartment buildings, purpose-built rentals, multi-unit holdings | Working farms, orchards, vineyards, ranches, farmland |
| Who usually orders it | The lender or the broker | The lender, at each draw stage | The lender or the borrower's advisor | The lender or the borrower |
Not every financing file needs the same depth of work, and the difference shows up in both the fee and the turnaround.
The lender decides which is acceptable, not the borrower and not the appraiser. The Appraisal Institute of Canada sets out criteria for when the lighter formats may be relied on for mortgage financing, and lenders apply their own rules on top. Ask your broker which one your file calls for before instructing anyone, because ordering the wrong one means paying twice.
A commercial appraisal applies up to three approaches, and the property decides which carry weight.
A report that applies one approach and ignores the other two without saying why is a report a credit officer will send back.
Both get offered to lenders, and both get sent back.
A comparative market analysis from a realtor is a pricing opinion, prepared to help set a list price. It is useful for that. It is not an appraisal, the person preparing it usually stands to earn a commission on the sale, and no lender treats it as independent evidence.
A property assessment notice is a mass-appraisal figure produced for taxation. The assessing authority values thousands of properties at once, against a valuation date set in legislation rather than the date your financing needs. It was never built to support a lending decision on a single property.
An appraisal is not a pricing opinion or a mass estimate. It is a single property, physically inspected, valued as of the date your lender actually cares about, by a licensed appraiser who gains nothing from the number landing high or low. Every comparable and adjustment is documented, which is what makes the file reviewable.
In most financing, the lender or the mortgage broker orders the appraisal, and the report is addressed to the lender. The borrower usually pays for it. That catches people out, because paying for a report does not make you its intended user.
This matters in two practical ways:
If you are not sure who should be ordering it, ask your broker or lender before instructing anyone. It saves paying twice.
A financing appraisal is a narrative report. It sets out the property, the inspection, the approaches applied, the evidence relied on and the reasoning that connects them to the final value. The report is prepared to allow lenders and other intended users to understand and evaluate the appraiser’s conclusions without having personally inspected the property.
Appraisal fees vary depending on the property type, complexity of the assignment, lender reporting requirements, and property location. A straightforward single-tenant retail property, for example, requires a different level of research and analysis than a working farm or a specialized commercial property. Each assignment is therefore quoted individually to reflect the scope of work, time, and expertise required to produce a thorough and well-supported valuation.
Tell us the property, the purpose and the lender’s deadline, and we will give you a fee estimate the same day, with no obligation.
Tell us the property and the purpose.
Address, property type, and what the financing is for. If your lender or broker has given you instructions, send those too.
We confirm the fee and the timeline.
Same day, no obligation, before any work starts.
We inspect and research.
The property itself, and the market evidence that supports the value.
You get the report.
Delivered to you and to the lender or broker you name.
You can, but check with the lender first. Many require that they or the broker instruct the appraiser directly, and a report ordered outside that process may not be accepted.
The lender sizes the loan against the appraised value, so the gap falls to you. That usually means a larger down payment, renegotiating the price, or finding a lender with different terms.
That is the lender’s decision and it varies by file. Ask your broker before ordering, because the wrong format means paying for a second report.
Not necessarily. Lists vary by lender and by region, and many lenders will accept a designated appraiser who is not on the list, particularly for property types that need specialist experience. Ask your broker.
Usually not as it stands. The report is addressed to a named client. A second lender will normally want it re-addressed, and sometimes updated, before relying on it.
That is the lender’s call and it varies. Effective dates have a shelf life, and in a moving market a lender will want a current figure rather than one from several months ago.
An assessment is a mass-appraisal figure produced for taxation, valued as of a date set in legislation. An appraisal values one property, inspected, as of the date your financing needs.
That is much of what we do. Working farms, vineyards, special-purpose commercial and rural property often fall outside a standard residential appraiser’s scope, which is why lenders send them to a designated commercial appraiser.
A designation from the Appraisal Institute of Canada, AACI or CRA depending on the property, and a report written to CUSPAP. Our appraisers hold both designations.
It depends on the property, the report format and how far it is. Tell us the lender’s deadline when you make contact and we will tell you straight away whether we can meet it.
The address, the property type, the purpose of the financing, and your lender or broker’s contact details if they are instructing.
Tell us the property, the purpose and the deadline. We will come back the same day with a fee and a timeline.
