Home Appraisal in BC: What Lenders Check and What Happens If It Comes In Low

Size and layout. Total square footage matters, but layout does too. A home with a functional floor plan appraises higher than one with awkward rooms or poor flow. Basements and bonus rooms add value, but finished basements without egress windows may be counted at a discount.

Recent comparable sales. The appraiser pulls sales of similar homes sold in the last 90 days within a reasonable distance. The fresher and closer the comps, the more weight they carry. In a fast market like ours, even a 30-day-old sale can be considered dated.

Market conditions. In a buyer's market (like the current 7-month inventory in Greater Vancouver), appraisals tend to be more conservative. Sellers' markets push appraisals upward. Appraisers account for days on market, list-to-sale ratios, and seasonal trends.

Special features. A pool, hot tub, or garage adds value. Views can add significant value. But certain factors reduce value: a commercial property next door, a home on a busy street, or environmental concerns.

How the Appraisal Process Works

Once you make an offer, your lender orders the appraisal. The process typically takes 7 to 14 days, though BC appraisers can be backed up in busy markets.

The appraiser schedules a visit to the property. The inspection usually takes 1 to 2 hours. They photograph the interior and exterior, measure square footage, note condition, and ask questions about recent repairs or upgrades. You don't need to be present, but some appraisers appreciate access to homeowner information.

After the visit, the appraiser compiles the report. This includes photos, property details, comparable sales analysis, and a final appraised value. The lender receives the report first. If you're the buyer, your real estate agent or lender will share it with you.

What Happens If the Appraisal is Lower Than Your Offer?

This is the appraisal gap. You offered $1,200,000. The appraisal comes back at $1,180,000. Your lender will only loan against the appraised value, not the higher purchase price.

You now have three options. First, bring more cash to closing. You would need to cover the $20,000 difference out of pocket. Second, renegotiate the purchase price with the seller. Third, walk away if your offer included an appraisal contingency.

In a buyer's market with 7 months of inventory, sellers often accept lower offers. But in competitive markets, sellers may refuse to renegotiate. Have your real estate agent check whether your offer includes an appraisal contingency before you make it. This clause protects you if the appraisal is low.

What's a Fair Appraisal Cost?

In BC, residential appraisals typically cost $350 to $550. The buyer usually pays. Your lender or real estate agent will tell you the cost upfront. In rare cases, the seller covers it as a concession, but this is unusual.

Can You Challenge an Appraisal?

Yes. If you believe the appraisal is unfair, you can request a reconsideration of value. This is not a re-appraisal. You submit written documentation showing why you think the value is wrong: missing comparable sales, misunderstandings about recent upgrades, or neighbourhood data the appraiser overlooked.

A full re-appraisal is expensive and rarely ordered unless the lender agrees. Be strategic about challenging an appraisal. If the amount is close to your purchase price, fight it. If it's significantly low, a second appraisal may be worth the cost.

Why Appraisals Matter Right Now in BC

With prices rising quickly in Greater Vancouver and the Fraser Valley, appraisal gaps are more common. Use Zealty to browse recently sold homes in your neighbourhood. Knowing what comparable homes actually sold for will help you make realistic offers and understand what to expect from the appraisal.

If you're a first-time buyer, review current market conditions for your area. Understand whether you're in a buyer's or seller's market. This context helps you evaluate the appraisal and negotiate if needed.

An appraisal protects both you and your lender. It's not an obstacle. It's confirmation that your home purchase is sound.