Overview
Appraisal independence is a core principle that ensures property valuations remain unbiased, objective and free from outside influence.
It protects lenders, borrowers, investors and the real estate market by ensuring each appraisal reflects true market value rather than pressure, expectations or negotiation tactics.
This guide explains what appraisal independence means, why it is legally required and how it affects the appraisal process across the GTA and surrounding areas.
When appraisal independence is compromised, risk increases for:
• Lenders
• Borrowers
• Insurers
• Courts
• Investors
Independent valuations help prevent inflated prices, fraudulent transactions and unreliable underwriting.
Understanding these rules helps clients work with appraisers the right way.
Appraisers must complete valuations without influence from:
• Borrowers
• Realtors
• Lawyers
• Mortgage brokers
• Sellers
• Lenders
• Builders
• Developers
Independence ensures that the final value reflects market evidence, not the needs or wishes of any party involved.
Key Rules That Protect Appraisal Independence
- Prevents Inflated Values
Overvaluation leads to financial risk for borrowers, especially during refinancing or high ratio lending.
- Ensures Lender Confidence
Lenders rely on independently produced values to assess collateral risk.
- Supports Fair Market Transactions
Independent valuations promote fair pricing for both buyers and sellers.
- Reduces Legal and Regulatory Risk
Independent appraisals stand up to:
• Court review
• Auditor review
• CRA examination
• Lender underwriting
• Legal disputes
- Helps Prevent Fraud
Valuation pressure is a major driver of mortgage fraud.
Independence protects all parties involved.
Appraisers Can Discuss:
• Property details
• Renovation timelines
• Rental income
• Condition
• Legal status
• Access arrangements
• Evidence provided for reconsideration
• Market facts
Appraisers Cannot Discuss:
• Desired or required values
• Hitting lender targets
• Changing value for approval
• Negotiating the value
• Using comparables that do not meet criteria
• Value guarantees or predictions
How Lenders Enforce Independence
Lenders follow strict compliance rules by:
• Ordering appraisals through independent systems
• Restricting client contact
• Reviewing reports internally
• Rejecting appraisals that show bias
• Conducting random audits
Independence is not optional. It is mandatory.
“If I tell the appraiser what value I need, it helps.”
It actually puts the entire appraisal at risk.
“The broker or realtor can influence the value.”
They cannot. Lenders prohibit value influence.
“If comparables support a higher value, the appraiser must match it.”
Only when all criteria are met. The appraiser decides what evidence is relevant.
“The appraiser works for me because I paid for it.”
The appraiser’s duty is to the lender and the valuation standard, not the payer.
Who does the appraiser work for?
For financing, the appraiser works for the lender, not the borrower.
Can clients speak directly to the appraiser?
Only about factual property information, not value.
Can the lender ask for a different value?
No. They can only request clarification or additional analysis.
Does independence apply to private appraisals?
Yes. Ethical and professional standards still require impartiality.
If you want an independent, well supported and lender ready appraisal for financing, legal matters or investment decisions, our team provides accurate valuations aligned with industry standards and compliance rules.
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