Commercial property appraisal and inspection: what to expect

Why does the lender have the property appraised

The property secures the loan. The lender therefore wants an independent opinion of its value.

BDC writes that the bank looks at the type of building, its condition, its age and its resale potential. It adds that due diligence may include an environmental assessment, a building condition assessment, an appraisal and a title search.

Each check answers a different question. None replaces the others.

An appraisal answers a simple question: what would the property be worth if it had to be sold? The lender uses it to set the amount it is willing to lend.

It does not say whether the project is good. Nor does it say whether the price paid is fair. It gives a value at a given date.

What does a certified appraiser do

The certified appraiser (évaluateur agréé) gives an objective, reasoned opinion on the value of a property or a right in real estate. They record it in an appraisal report.

They are not the seller, the buyer or the lender. Their role is to support their conclusion with data.

For an income-producing property, expect them to review leases, income and expenses. Ask them, or the lender, which method will be used.

To establish value, an appraiser generally compares three approaches: comparable sales, the income the property produces and the cost of rebuilding. The weight of each depends on the type of property.

They visit the site, review the leases and gather market data. They record their assumptions in the report.

Read those assumptions. A market rent assumed too high or a poorly chosen rate changes the value.

What does the Ordre des évaluateurs agréés du Québec oversee

The Order's website says its mission is to protect the public by monitoring the quality of its members' work. It does so throughout their professional lives.

• A code of ethics
• Standards of professional practice
• Professional inspection and mandatory continuing education
• Admission requirements and professional liability insurance
• Disciplinary sanctions

Check that the person the lender appoints is a member of the Order.

What about the OACIQ

The OACIQ does not regulate appraisal. It protects the public in real estate brokerage, meaning the brokers and agencies that sell, buy or lease.

The Québec government also states that mortgage brokerage has fallen under the Autorité des marchés financiers since May 1, 2020. The OACIQ supervised it until April 30, 2020.

A valuation obtained from a real estate broker is therefore not a certified appraiser's report. The lender states which report it accepts.

A real estate broker can give you a price opinion for selling or buying. That helps with negotiating, but it is not an appraisal report produced by a certified appraiser.

For financing, always ask the lender which type of report it accepts. It states this in its request.

You can also check a mortgage brokerage firm's registration with the AMF. It oversees that discipline.

What other expert reports should you plan for

Depending on the project, the lender may ask for several reports.

• An environmental assessment, often Phase I, to spot contamination risks
• A building inspection, describing the condition of the structure and systems
• A title search, confirming the owner and any charges
• Sometimes a land survey

BDC mentions the environmental assessment, the building condition assessment, the appraisal and the title search. Other reports depend on the lender.

A Phase I environmental assessment is first a desk review. It looks at the history of the land and neighbouring uses.

If it flags a risk, a next step with samples may follow. That adds time and cost.

A building inspection reviews the roof, structure, electrical, plumbing and heating. It puts a cost on the work ahead, which feeds the budget.

The lender often chooses its experts or approves a list. BDC explains that using bank-approved experts helps. If the expert is not approved, the bank may ask for a second opinion. That can delay the deal.

Who pays varies. The costs often fall on the borrower, but confirm before ordering.

The lender or its lawyer may also ask for compliance documents: permits, location certificates or proof of insurance.

These are easier to get than expert reports, but they also take time. Request them early.

What if the value comes in below the price

According to BDC, a lender generally finances a percentage of value, not of price. If the appraisal is lower than the price, the loan amount can drop.

• Ask the lender how it wants to proceed
• Ask for the appraiser's assumptions
• Negotiate the price if the offer allows
• Plan for a larger down payment

A financing condition in the purchase offer protects the buyer. Have a legal professional review it.

Read the whole appraisal, not just the final value. The comparables chosen and the assumptions show where the gap comes from.

If you think the report contains a factual error, tell the lender in writing, with supporting documents. A difference of opinion is not enough.

The Ordre des évaluateurs agréés monitors the quality of its members' work, but that does not replace a discussion with the lender.

What should you do next

Before ordering a report, ask your lender which experts it accepts and which reports it wants. That avoids paying twice.

To compare financing types, see the commercial financing family and the guide on the financing application. PMECAP is a free comparison site; its form goes to a mortgage brokerage firm registered with the AMF. PMECAP does no appraisals.

FAQ

Sources

• BDC — How to get approved for commercial real estate financing (accessed October 13, 2026)
• Ordre des évaluateurs agréés du Québec (accessed October 13, 2026)
• Gouvernement du Québec — L'AMF encadre dorénavant le courtage hypothécaire (accessed October 13, 2026)