Certified Property Appraisal in Quebec: Cost, Process, Disputes | Brok

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Certified Appraisal: A Key Step in Mortgage Financing

A certified appraisal is one of the most important elements in the mortgage financing process, yet also one of the least understood by borrowers. Performed by an appraiser who is a member of the Ordre des évaluateurs agréés du Québec (OEAQ), it provides an independent, professional estimate of a property's market value. The lender uses this appraisal to confirm that the property offers sufficient security relative to the requested loan amount.

When Is a Certified Appraisal Required?

Mortgage refinancing: almost always required, as the lender must confirm current value without a recent sale transaction.
Purchase with conventional down payment (20% or more): often required unless the lender accepts an AVM.
Atypical properties: luxury homes, rural properties, lots with non-standard buildings.
Lender transfer at renewal: the new lender may require an appraisal to verify current value.
High-ratio loans: some mortgage insurers (CMHC, Sagen, Canada Guaranty) may request an appraisal based on their criteria.

The Appraisal Process

Appraiser Assignment: The lender assigns an appraiser from its approved list or through an appraisal management service (Solidifi, NAS). The borrower generally cannot choose their own appraiser.
Scheduling and Visit: The appraiser contacts the homeowner or occupant to schedule a visit. The inspection typically takes 30 to 60 minutes and includes measurements, interior and exterior condition verification, and photographic documentation.
Comparable Analysis: The appraiser researches recent sales of similar properties in the same geographic area. Adjustments are applied for differences in size, condition, location, and features.
Report Writing and Submission: The report, compliant with CUSPAP standards, is submitted directly to the lender. It contains the estimated market value, comparables used, detailed property description, and observed market conditions.

What to Do If the Appraisal Is Disappointing

An appraisal that comes in below the purchase price or expected value is a situation the broker must know how to handle. Several options are available to the borrower: increase the down payment to cover the difference, renegotiate the purchase price with the seller, or ask the lender to submit additional comparable sales to the appraiser for reconsideration. The broker can gather recent sales data in the area that may not have been considered by the appraiser, or provide détails about major renovations that increase the property's value. This approach does not guarantee an adjustment, but it is often successful when relevant elements were overlooked.

Formal Disputes and Recourse

If the borrower believes the appraisal contains a professional error (inappropriate comparables, factual errors, non-compliance with CUSPAP), they can file a complaint with the Ordre des évaluateurs agréés du Québec (OEAQ). The OEAQ can conduct an investigation and, if warranted, sanction the appraiser at fault. However, a disagreement over estimated value is not in itself grounds for a complaint; there must be a demonstrable professional error. The mortgage broker, as an intermediary, must guide the client through this process with professionalism and realism.

Frequently Asked Questions

When is a certified appraisal required for a mortgage?

A certified appraisal is generally required for mortgage refinancing, for a purchase when the lender deems it necessary (atypical property, price appearing off-market, etc.), for certain renewals with a lender transfer, and when automated valuation models (AVMs) cannot produce a reliable result. Some lenders systematically require an appraisal for high-ratio loans.

How much does a certified appraisal cost in Quebec?

For a standard single-family home, the cost is between $350 and $600. For a condo, the cost is often in the same range. For an income property (duplex, triplex), the cost can reach $600 to $1,000 or more due to additional complexity. These fees are usually borne by the borrower.

What happens if the appraisal comes in below the purchase price?

If the appraisal is below the purchase price, the lender will calculate the loan-to-value ratio based on the lower value. The buyer will then need to increase their down payment to cover the difference, negotiate a lower price with the seller, or in some cases, dispute the appraisal by providing additional comparables to the lender.

Can you dispute a certified appraisal?

Yes. The borrower can ask the lender for a review by submitting recent comparable sales, détails about unconsidered renovations, or factual corrections. The lender may agree to submit these elements to the appraiser for reconsideration. In cases of suspected professional misconduct, a complaint can be filed with the OEAQ.

Can the borrower choose their own appraiser?

No. In most cases, the lender assigns the appraiser from its own approved list or uses an appraisal management service like Solidifi or NAS. This practice ensures the appraisal's independence and avoids any conflict of interest between the borrower and the appraiser.

What is the difference between a certified appraisal and an AVM?

An AVM (automated valuation model) is a computer tool that estimates a property's value using statistical data and algorithms, without a physical visit. A certified appraisal involves an on-site inspection by a certified professional and a detailed report. An AVM is faster and less expensive but less reliable for atypical properties.