That’s why we often recommend you get your appraisal done earlier in the process. In today’s market, waiting too long can risk derailing the whole transaction.
It’s not worth the gamble—get ahead of it while you still have time to adjust if needed.
Across many Canadian markets, we’re seeing sale prices that just aren’t supported by recent comparable sales. This is especially true in areas where bidding wars are still pushing offer prices well above what lenders consider “fair market value.”
The key thing to remember here is that lenders don’t care so much what someone paid for a home—they care what an independent appraiser says it’s worth. And when that number comes in lower than expected, you’ve got a financing gap. Unless the buyer can make up the shortfall with cash, the whole deal could fall apart.
That’s exactly why we need to get ahead of the curve.
Buying a home? Build in five days for financing conditions
Here’s some old-school advice that’s never been more relevant: If you’re buying a home, insist on a five-day financing condition.
That window isn’t just for the lender to approve you as a borrower. It’s also a critical time to get an appraisal completed before you waive any conditions. If the appraised value doesn’t match the purchase price, you still have time to reassess your options—without being legally on the hook for the full purchase amount.
I know some buyers feel pressured to go in firm these days. However, firm offers without financing conditions are risky in this market, especially when appraisals fall short left and right.
That said, if you have additional $$, and you are totally okay if the appraisal comes in light, then sure you can make a firm offer if that floats your boat.
Refinancing? Order the appraisal upfront—especially with private lenders
If you’re refinancing, you might get lucky and hear these three magic letters: AVM.
What is an AVM?
AVM stands for Automated Valuation Model. It’s a computer-based system that uses mathematical modelling to estimate the market value of a property. AVMs pull data from recent sales, tax assessments, MLS listings, and price trends to spit out a value—no in-person appraiser needed.
Why AVMs matter in mortgages
- Used by lenders: Especially for low-ratio or low-risk mortgage applications
- Fast and cost-effective: Sometimes, you get results instantly
- Helps manage lender risk: Keeps portfolio values current
- Ideal for refis and HELOCs: When a full appraisal may not be required
The limitations of AVMs
- They often miss unique property features, renovations, or current condition
- In rural or volatile markets, they can be wildly off the mark due to limited sales data
While AVMs are helpful, many lenders still require full appraisals—especially if there’s any uncertainty in the result or if the loan-to-value ratio is on the high side.
Of course, an AVM is possible for purchases too, not just in refinance situations.
Private lender? Don’t wait to order the appraisal
When dealing with private lenders, you’ll almost never hear the term AVM. These lenders pretty much always want a full appraisal—and here’s where things can get tricky.
Too often, we see this happen:
A private lender issues an approval, everyone gets excited, and we think we’re off to the races. But until the appraisal is complete, nothing’s locked in.
If the appraised value comes in low, the lender might reduce the loan amount or change the terms. Suddenly, the deal doesn’t look nearly as good—and in some cases, it’s no longer workable at all.
Now, I get that with private lenders, ordering the appraisal upfront can feel like a gamble. Most have their own list of approved appraisers, and choosing one early can be risky. That said, there are a few “usual suspects”: appraisers who are widely accepted by most private lenders. If we use one of them early on, we can get a big head start and avoid nasty surprises later.
Getting the appraisal upfront helps you:
- Avoid last-minute surprises and shortfalls
- Stay on schedule with your closing
- Boost your confidence that your approval will hold
- Avoid scrambling to find new financing or renegotiating terms
The bottom line
Whether you’re buying or refinancing, ordering the appraisal early is often the smartest move you can make. Getting ahead of this step can save you time, money, and a whole lot of stress.
If you’re purchasing, protect yourself with a five-day financing condition—and use that time wisely. If you’re refinancing—especially with a private lender—let’s get that appraisal done first, using an appraiser we know will be accepted.
This isn’t about being overly cautious. It’s about being prepared and proactive in a market where surprises can cost thousands and kill a deal.
Your mortgage broker can guide you through the process, keep things moving smoothly, and make sure you’re not caught off guard.
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Last modified: April 4, 2025
