The turbulent and unpredictable real estate market – particularly in the condo sector – means it’s essential for brokers and borrowers to detect potential appraisal issues fast
It’s become a familiar challenge for borrowers and mortgage brokers in recent years, especially in Toronto’s crisis-struck condo market: suddenly finding out when closing time comes around that a property appraisal is coming in lower than the agreed price.
The current volatile market means the difference between those two values often stretches into tens of thousands of dollars, plunging many buyers into crisis as they scramble for ways to make up the shortfall.
Getting out in front of that possibility and finding out about potential hurdles as soon as possible should be a foremost priority for brokers with that in mind, according to Appraisal Institute of Canada president Terry Dowle (pictured top).
He told Canadian Mortgage Professional brokers and borrowers needed to establish contact with appraisers early in the mortgage process so they can know well in advance if a deal has the potential to go sour.
“Everybody is usually focused on their own specific timeline: ‘I’ve got to get this paperwork done. I’ve got to get it to the lender. I’ve got to follow the process,’” Dowle said. “Typically, the appraisal is one of the things that’s usually left to the end.
“So the best advice I can give to a mortgage broker, agent, or anybody that’s trying to engage a professional appraiser is to have some direct communication with that appraiser and have that communication early.”
‘Where there’s an expectation of a million-dollar value… communication is key’
Appraisers have specific information they need to assess: the scope of the assignment, including timelines and the lender’s specific criteria. Brokers and agents can express their needs directly to the appraiser, who can then provide an engagement summary including the correct fee for that service, the type of report that will be produced and the timeline for the report.
Direct communication between a broker and appraiser can limit confusion and frustration when there’s a lack of clarity for the borrower, Dowle said, on how their property is being assessed – “especially when expectations may not align.
“So when you’re thinking of that resale property and there’s an expectation of a million-dollar value, having that communication with the appraiser early [is key].”
In Toronto, the average selling price of a home was down 5.2% in August year over year, while condo prices continued to dive as demand cooled further and inventory flooded the market.
With mortgage renewals hitting harder in 2025, Tracy Valko of Valko Financial urges brokers to rethink the default refinance. “Right-sizing” isn’t downsizing—it’s aligning homeownership with financial reality, alleviating debt, and starting fresh.https://t.co/VFX3DO6BVU
— Canadian Mortgage Professional Magazine (@CMPmagazine) September 13, 2025
And a rebound doesn’t appear to be in the cards anytime soon. A new Canadian Imperial Bank of Commerce (CIBC) and Urbanation report suggested prices needed to fall again, with further interest rate drops, before the market jolts back to life.
The 'gold standard' for mortgage brokers working with appraisers
A glut of new inventory scheduled to hit the market between now and the end of the year, meanwhile, is likely to weigh against prices as investors and buyers alike flock to the sidelines.
For many buyers who purchased preconstruction condos when the market was red-hot in years gone by, that slowdown is presenting huge problems and leaving them liable to huge losses and potential legal action if they try to walk away from the purchase.
Sellers are likely to be impacted, too – and for brokers, the importance of working with appraisers has never been clearer, according to Dowle.
“The appraiser is likely going to say, ‘Listen, you’ve got a presale of a million bucks. I know the market has gone down. That value is not going to be there. Is your deal going to collapse? Because I’m going to be coming in at a lower value. I’ve got to do my research, but I’m telling you it’s not going to be there,’” he said.
“That then informs the brokers, and they can make changes before the 11th hour. So that direct communication is what I would suggest. The gold standard would be just to communicate directly with the appraisers and not influence them, but explain the situation so that both parties are on the same page when they’re looking at producing that report.”
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