What Is a Home Appraisal?
A home appraisal is a professional assessment of a property's market value conducted by a licensed appraiser. When you're buying a home with a mortgage, your lender will require an appraisal to confirm the property is worth what you're paying for it.
Think of it this way: the bank wants to make sure that if you stop paying your mortgage, they could sell the property and recover their money. The appraisal protects them — and it protects you from overpaying.
Key Takeaway
Why Do Lenders Require Appraisals?
Your lender isn't just lending you money — they're lending against the property as collateral. Before they approve your mortgage, they need independent verification that the home is actually worth the purchase price.
If you're buying a home for $900,000 but an appraiser determines it's only worth $850,000, the lender will only base your mortgage on the $850,000 value. You'd need to cover the $50,000 gap yourself or renegotiate the purchase price.
💡 How It Affects Your Mortgage
How Does the Appraisal Process Work?
Here's what happens after your lender orders an appraisal:
Appraiser assigned
Your lender arranges for a licensed appraiser to visit the property. You don't choose the appraiser — this keeps the process independent and unbiased.
Property inspection
The appraiser visits the home and spends 30–60 minutes examining it. They'll measure the square footage, note the number of bedrooms and bathrooms, assess the overall condition, and take photos.
Comparable sales analysis
Back at their office, the appraiser researches recent sales of similar properties in the area — typically 3–6 comparable homes that sold within the last 6 months. They adjust for differences in size, condition, features, and location.
Report submitted
The appraiser submits their report to the lender, usually within 3–5 business days. The report includes the estimated market value, the comparable sales used, and notes on the property's condition.
What Do Home Appraisers Look For?
Appraisers evaluate several factors when determining a property's market value:
| Category | Factors Evaluated |
|---|---|
| Property Characteristics | Square footage (above-grade), bedrooms, bathrooms, lot size, age of home, basement finish, garage type |
| Condition & Quality | Overall maintenance, construction quality, finishes, damage or deferred maintenance, renovations (kitchen, baths, flooring), major systems (roof, furnace, hot water tank) |
| Location Factors | Neighbourhood and street appeal, proximity to amenities, schools, and transit, traffic and noise levels, view (if applicable) |
⚠️ Appraisal ≠ Inspection
Appraisal vs Home Inspection: What's the Difference?
These two services serve completely different purposes, and you need both when buying a home:
| Feature | Home Appraisal | Home Inspection |
|---|---|---|
| Purpose | Determines market value | Identifies defects and issues |
| Ordered by | Lender | Buyer |
| Time on site | 30–60 minutes | 2–4 hours |
| Focus | Comparable sales & value estimate | Systems, structure & defects |
| Required? | Yes, for mortgage approval | No, but strongly recommended |
| Cost in BC | $300–$500 | $400–$700 |
The appraisal satisfies your lender. The inspection protects you from buying a home with expensive hidden problems. I always recommend getting both.
What Happens if the Appraisal Comes in Low?
A low appraisal — where the appraised value is less than your purchase price — creates a gap you'll need to address. Here are your options:
- Renegotiate the price: Ask the seller to reduce the purchase price to match the appraised value. In a balanced market, sellers often agree rather than lose the deal.
- Make up the difference: If you have the cash, you can pay the gap out of pocket. Your down payment stays the same percentage, but you're bringing more money to closing.
- Challenge the appraisal: If you believe the appraiser missed relevant comparable sales or made errors, your lender can request a reconsideration of value. This doesn't always work, but it's worth trying if you have strong evidence.
- Walk away: If you included a financing subject in your offer and can't resolve the gap, you can exit the deal and get your deposit back.
✅ Low Appraisals Are Uncommon
How Much Does a Home Appraisal Cost in BC?
Appraisal fees in BC typically range from $300 to $500 for a standard single-family home. Several factors affect the cost:
| Factor | Impact on Cost |
|---|---|
| Property type | Houses cost more to appraise than condos |
| Property size & complexity | Larger homes with unique features take longer |
| Location | Rural properties may cost more due to fewer comparable sales |
| Rush orders | Expedited reports cost $50–$150 extra |
Your lender arranges the appraisal, but you pay for it — usually as part of your closing costs. Some lenders include the appraisal fee in their mortgage package, so ask upfront.
How to Prepare for an Appraisal (For Sellers)
If you're selling and want the appraisal to reflect your home's full value, here's what I recommend:
- Clean and declutter: First impressions matter — even for appraisers. A clean, tidy home appears better maintained.
- Complete minor repairs: Fix leaky faucets, broken fixtures, chipped paint, and anything that signals deferred maintenance.
- Provide full access: Make sure the appraiser can see all areas including the basement, garage, and any outbuildings.
- List recent upgrades: Give the appraiser a written list of improvements with approximate costs and dates — new roof, renovated kitchen, updated electrical, etc.
- Don't follow the appraiser around: Let them do their job independently. Being available for questions is fine, but hovering creates pressure.
Major renovations should already be reflected in your listing price, but a written list helps ensure the appraiser accounts for them in their comparable adjustments.
Next Steps
Understanding the appraisal process helps you prepare for one of the key steps in your mortgage approval. If you're buying a home in Surrey or the Fraser Valley and have questions about appraisals — or any part of the buying process — I'm happy to walk you through it.
Planning Your Purchase?
Use my closing costs calculator to estimate all the costs involved in buying a home in BC — including your appraisal fee.
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