Do Real Estate Agents Do Appraisals? The Role of an Appraiser in the Process
No — real estate agents do not do appraisals. A formal property appraisal is conducted by a licensed, independent appraiser with professional credentials. However, real estate agents do provide a Comparative Market Analysis (CMA), which is an informal estimate of your home's value based on recent sales data.
Understanding the difference between what your agent provides and what a certified appraiser does is important — especially when it comes to mortgage financing, legal matters, and tax obligations.
Agent CMA vs. Formal Appraisal
Both serve important but distinct purposes. Here is a side-by-side comparison:
What Your Real Estate Agent Provides
While agents do not perform formal appraisals, an experienced agent's Comparative Market Analysis is a valuable tool for making informed pricing and offer decisions.
A CMA Typically Includes:
What a Licensed Appraiser Does
A certified appraiser provides an independent, professional opinion of value that meets national standards (CUSPAP — Canadian Uniform Standards of Professional Appraisal Practice).
Property Inspection
The appraiser visits the property to inspect its condition, measure square footage, note the quality of construction and finishes, assess the lot, and document any issues that affect value (deferred maintenance, structural concerns, environmental factors).
Market Research and Analysis
The appraiser researches comparable sales, analyses market trends, and applies one or more valuation approaches: the sales comparison approach (most common for residential), the cost approach (replacement cost minus depreciation), and the income approach (for investment/rental properties).
Written Report
The appraiser produces a detailed written report that includes the property description, photographs, comparable sales analysis, adjustments, methodology used, and the final opinion of value. This report is a legal document that the appraiser stands behind professionally.
When Do You Need a CMA vs. an Appraisal?
A CMA Is Sufficient When:
- Setting a listing price to sell your home
- Deciding how much to offer on a property
- Getting a general sense of your home's current value
- Evaluating whether to renovate or sell as-is
- Monitoring your neighbourhood's market over time
You Need an Appraisal When:
- Obtaining or renewing a mortgage (lender requirement)
- Refinancing or accessing home equity
- Settling an estate (determining value at date of death)
- Dividing assets in a divorce or separation
- Appealing a property tax assessment
- Capital gains tax calculations
- Litigation or insurance claims
The Home Appraisal Process
If you are buying a home with a mortgage, here is how the appraisal process typically works:
Lender Orders the Appraisal
After your offer is accepted and your mortgage application is submitted, the lender orders an appraisal from their approved panel of appraisers. The buyer typically pays the fee.
Appraiser Schedules the Inspection
The appraiser contacts the listing agent or homeowner to schedule an in-person visit. The inspection usually takes 30 minutes to an hour for a standard residential property.
Property Inspection
The appraiser measures the home, photographs the interior and exterior, notes the condition and quality of finishes, and identifies any issues that affect value.
Research and Analysis
The appraiser researches comparable sales, analyses market conditions, and applies the appropriate valuation methodologies to arrive at a supported opinion of value.
Report Delivered to Lender
The completed appraisal report is sent to the lender (not directly to the buyer). The lender uses the appraised value to determine the maximum mortgage amount. The buyer typically receives a copy as well.
Mortgage Decision
If the property appraises at or above the purchase price, the mortgage proceeds as planned. If it appraises lower, the buyer, seller, and agents negotiate a solution.
What If the Appraisal Comes in Low?
A low appraisal — where the appraised value is less than the agreed purchase price — is more common than you might think. Here are your options:
Cover the Difference
Increase your down payment to make up the gap between the appraised value and the purchase price. The lender will only finance based on the lower appraised value.
Renegotiate the Price
Ask the seller to reduce the purchase price to match the appraised value. In a balanced or buyer's market, sellers are often willing to negotiate.
Challenge the Appraisal
Provide additional comparable sales data that supports a higher value. Your agent can help compile relevant recent sales the appraiser may have missed.
Use Your Financing Condition
If you included a financing condition in your offer and cannot secure a mortgage at the agreed price, you can exit the deal without penalty.
Frequently Asked Questions
Do real estate agents do appraisals?
No. Real estate agents do not conduct formal appraisals. Appraisals are performed by licensed, independent appraisers who hold professional designations such as AACI (Accredited Appraiser Canadian Institute) or CRA (Canadian Residential Appraiser). What agents do provide is a Comparative Market Analysis (CMA) — an informal estimate of a property's value based on recent comparable sales. While a CMA is valuable for pricing decisions, it is not a certified appraisal and is not accepted by lenders, courts, or the CRA for official purposes.
What is the difference between a CMA and an appraisal?
A Comparative Market Analysis (CMA) is prepared by a real estate agent using MLS data on recent comparable sales, active listings, and expired listings. It is typically free, informal, and used for pricing a home for sale or evaluating a purchase. A formal appraisal is conducted by a licensed appraiser who physically inspects the property and uses standardised methodologies (sales comparison, cost, and income approaches) to determine value. Appraisals are legally binding professional opinions, accepted by lenders for mortgage approval, by courts for legal proceedings, and by the CRA for tax purposes. A CMA is a marketing tool; an appraisal is a professional valuation.
When do I need a formal appraisal?
You typically need a formal appraisal in these situations: mortgage financing (most lenders require an appraisal before approving a mortgage), refinancing your home, estate settlement (to establish fair market value at the date of death), divorce or separation (for equitable division of assets), property tax appeals (if you believe your MPAC assessment is too high), capital gains tax calculations on investment properties, litigation or insurance claims, and when buying or selling without a real estate agent (to ensure fair pricing). Your lender usually orders the appraisal directly from an approved appraiser.
How much does a home appraisal cost in Canada?
A standard residential appraisal in Canada costs between $300 and $500, though prices vary by location, property type, and complexity. Larger properties, rural properties, or unique homes may cost $600 to $1,000 or more. Commercial property appraisals are significantly more expensive, typically $2,500 to $5,000+. When an appraisal is required for a mortgage, the cost is typically paid by the buyer, though some lenders cover it as part of their mortgage package. The appraiser is usually selected by the lender, not the buyer or seller, to ensure independence.
What happens if the appraisal comes in lower than the purchase price?
If the appraisal is lower than the agreed purchase price, several things can happen: the lender will only finance based on the appraised value (meaning you need a larger down payment to cover the difference), you can renegotiate the purchase price with the seller, the seller may reduce the price to match the appraisal, you can challenge the appraisal by providing additional comparable sales data, or you can walk away from the deal if you have a financing condition. This is one reason why financing conditions in an offer are important — they protect you if the property does not appraise at the agreed price.
Can a real estate agent's CMA be as accurate as an appraisal?
In many cases, an experienced agent's CMA can be very close to the appraised value — especially in areas with plenty of recent comparable sales. However, a CMA is an informal estimate, not a certified valuation. Agents have deep market knowledge and access to MLS data that appraisers also use, but agents may also have a financial interest in the transaction (listing or selling the property), which is why lenders, courts, and the CRA require independent appraisals. Think of a CMA as an excellent first step for pricing decisions, and an appraisal as the formal, independent verification when legal or financial certainty is required.
Related guides: Fair Market Value of a Home | Capital Gains Tax | Finding the Perfect Agent | Closing Costs When Selling