By The Papousek Team
A home appraisal can feel like a behind-the-scenes step in a real estate transaction—until it impacts your financing, your sale price, or your negotiating leverage. In Ontario, appraisals are most commonly required by lenders to confirm a property’s market value before approving a mortgage. They can also be used for refinancing, private sales, estate planning, and other situations where an objective opinion of value matters.
If you’re buying or selling in Mississauga (or anywhere in the GTA), understanding how home appraisals work helps you avoid surprises and plan strategically. Here’s what you need to know.
What is a home appraisal?
A home appraisal is a professional opinion of a property’s market value, typically completed by a licensed appraiser. The appraiser evaluates the home’s features, condition, and location, then compares it to recent nearby sales of similar properties to estimate what the home would likely sell for in the current market.
Appraisals are not the same as a home inspection:
- An inspection focuses on condition and potential issues (roof, plumbing, electrical, structure).
- An appraisal focuses on value and marketability for financing purposes.
Why appraisals matter in real estate
Appraisals can directly impact a transaction when:
- A lender wants to ensure the property supports the mortgage amount
- A buyer is financing with a smaller down payment and the lender requires confirmation of value
- A market is shifting and price expectations are changing quickly
- A home is unique or harder to compare (custom builds, large lots, premium pockets)
When a home appraises at or above the purchase price, financing typically proceeds smoothly. When it appraises below, buyers and sellers may need to renegotiate—or the buyer may need to bring additional funds to close.
When do you need an appraisal?
You may encounter an appraisal in several scenarios:
- Buying a home with a mortgage: Many lenders require an appraisal (or an automated valuation review) to confirm value.
- Refinancing: A lender may order an appraisal to verify current value before extending new terms.
- Switching lenders at renewal: Some lenders request updated value confirmation.
- Private sale or family transfer: An appraisal can provide an impartial benchmark for fair value.
- Estate settlement: Appraisals are often used to support valuation needs.
Not every deal requires a full in-person appraisal—some lenders use a “desktop” or automated approach depending on the property, loan type, and market conditions.
What appraisers look at
Appraisers evaluate both the home itself and the context around it. Common factors include:
Property basics
- Lot size and dimensions
- Overall square footage and layout
- Number of bedrooms and bathrooms
- Parking (driveway, garage, number of spaces)
- Age of the home and build quality
Condition and upgrades
- Renovation quality and consistency (kitchen/bath updates, flooring, windows)
- Mechanical systems (HVAC, electrical, plumbing)
- Signs of deferred maintenance (water damage, roof wear, foundation concerns)
- Curb appeal and overall presentation
Location and neighbourhood
- School catchments and perceived desirability
- Transit access, commuting routes, walkability
- Proximity to parks, shopping, and amenities
- Neighbourhood comparables and recent sales activity
In Mississauga, neighbourhood nuance can matter a lot. For example, a property in a premium pocket with strong buyer demand (such as established areas with mature lots and proximity to lakefront amenities) may be evaluated differently than a similar home in a higher-turnover area with more variable comparables.
How comparable sales (“comps”) influence appraised value
Comparable sales are typically the most important part of the appraisal. Appraisers look for recent, nearby sales that are similar in:
- Property type (condo, townhome, detached)
- Size and layout
- Condition and finish level
- Lot characteristics (for freehold homes)
- Location within the neighbourhood
They then adjust for differences. For example:
- If the subject property has an extra bathroom, the appraiser may add value compared to a comp.
- If a comparable sale has a renovated kitchen and the subject property does not, the appraiser may adjust downward.
A key point: appraisals tend to be evidence-driven and often place more weight on closed sales than on listing prices or market sentiment.
What can cause a low appraisal?
Low appraisals can happen even in strong markets. Common reasons include:
- Rapid price increases: Closed sales may lag behind current buyer competition.
- Limited comps: Unique homes or low-turnover neighbourhoods can be harder to match.
- Overpricing vs. condition: If a home is priced like a renovated property but presents as dated, the numbers may not support it.
- Inconsistent renovations: High-end upgrades in one area with major dated components elsewhere can confuse value positioning.
- External factors: Busy roads, awkward lot placement, or nearby adverse features can impact valuation.
What happens if the appraisal comes in low?
If the appraisal is below the purchase price, several outcomes are possible:
- Buyer increases down payment: The lender typically lends based on the appraised value, not the purchase price, so the gap may need to be covered.
- Price renegotiation: Buyer and seller may agree to reduce the price.
- Buyer switches lenders or financing: Some lenders assess differently, but there’s no guarantee a second appraisal will be higher.
- Deal termination: Depending on the contract terms (and financing conditions), the buyer may be able to walk away.
If you’re selling, a low appraisal can be frustrating—but it’s not always a verdict on your home’s true market potential. It can reflect a lack of strong comparable sales, timing, or conservative methodology.
How sellers can prepare for an appraisal
If you’re selling and you know an appraisal is coming, preparation is worthwhile.
Practical steps:
- Ensure the home is clean and presentable: Appraisals aren’t “staging-based,” but condition and care are still observed.
- Complete small repairs: Loose handles, cracked tiles, dripping taps, damaged trim—these are easy negatives to remove.
- Organize a list of upgrades: Include dates and approximate costs for renovations, windows, roof, HVAC, etc.
- Provide relevant context: If your home has features that aren’t obvious (insulation upgrades, waterproofing, smart systems), note them.
The goal is to help the appraiser see the full picture quickly and accurately.
How buyers can protect themselves
Buyers can reduce appraisal risk by:
- Avoiding emotionally inflated offers that aren’t supported by nearby comps
- Understanding what features actually contribute to value in that neighbourhood
- Keeping financing conditions appropriate to the situation
- Working with professionals who can advise on pricing realism and comp strength
A well-supported offer is less likely to face a financing roadblock.
Frequently Asked Questions (FAQ)
Is an appraisal the same as a home inspection?
No. An inspection evaluates condition and potential issues; an appraisal estimates market value for financing and lending purposes.
Who pays for the home appraisal?
In most mortgage scenarios, the buyer pays as part of the lending process, though practices can vary by lender and product. For refinancing, the homeowner typically pays.
Can I challenge a low appraisal?
Sometimes. If there are factual errors (square footage, bedroom count, missed upgrades) or better comparable sales that weren’t considered, your lender may allow a review or reconsideration. Outcomes vary.
Do renovations always increase appraisal value?
Not always dollar-for-dollar. Appraisers consider quality and market expectations. Over-improving beyond neighbourhood norms can limit the valuation impact.
How long does an appraisal take?
Timing varies. Some are completed quickly (desktop/automated), while in-person appraisals require scheduling and reporting time. Your lender can provide the most accurate timeline.
Need a value reality check before you buy or sell?
Whether you’re preparing to list, negotiating an offer, or refinancing, the best way to reduce appraisal surprises is to understand how your home fits the market right now. The Papousek Team can walk you through local comparables, pricing strategy, and the features that tend to matter most to buyers and lenders in Mississauga.
Reach out to The Papousek Team to book a no-pressure consultation and get clear guidance on value, positioning, and next steps.
