Here’s what home appraisers want you to know about the current market
The risk by waiting too long is a possible costly restart if a valuation comes in well below the number used in the mortgage application – a scenario that’s all too common in markets like Toronto, especially in the condo sector where price depreciation is showing no sign of slowing.
While brokers’ influence over appraisal decisions is extremely limited, additional context can also help. Details on hidden upgrades, permitted renovations, or a comparable off-market sale a broker is aware of won’t necessarily change an appraiser’s mind but “certainly give me additional data points for my consideration which might change my opinion of value,” Dowle said.
The bigger problem: thin data
The market itself isn’t the biggest structural problem for appraisers. Rather, it’s the shrinking pool of transactional data available to support their reports, a shift Dowle said has become more pronounced over roughly the past two years.
The scarcity of data, according to Dowle, has forced appraisers to adopt more of a “shotgun” approach to understand the market – and many are now gravitating back toward practices common decades ago, re-engaging directly with real estate agents and other market participants to confirm sales rather than relying solely on data pulled from a computer.
Market watchers have asked the same question for months, if not years: When are things expected to turn around, and values to stabilize? Dowle sees the market staying in a holding pattern for some time, influenced in part by the wave of mortgage renewals still taking place across the country.
