A lender selling under power of sale must take reasonable care to get fair market value for the home. In practice, lenders get one or more independent appraisals before listing, list the home on the open market at a price the appraisals support, and keep the reports on file in case the owner, another creditor or a court questions the price.
- Your fee in writing within one business day
- Reports 1–2 business days after the home visit
- Signed by an appraiser designated by the Appraisal Institute of Canada
- Past dates are fine, even years later
In this article
- The lender's duty: reasonable care to get fair market value
- Who relies on the value
- How an appraiser values a power of sale property
- What if the sale price is questioned later?
- Owners can order their own appraisal
- Why independence matters
- How much does a power of sale appraisal cost?
- Quick answers
- Official sources
- What happens next
The lender's duty: reasonable care to get fair market value
The lender controls a power of sale, but it can't simply accept any offer. It must act in good faith and take reasonable care to get fair market value, because the price decides how much of the debt is repaid, whether the borrower faces a shortfall, and whether anything is left for later creditors and the owner.
The law doesn't spell out a specific appraisal, but an independent appraisal before listing is the most common way for a lender to show it met that duty.
Who relies on the value
- The lender, to set the list price and judge the offers it receives.
- The lender's lawyer, to support the sale price and the statement of account if the owner or another creditor asks how the price was set.
- The owner, to check whether the proposed price is fair, and to see how much equity is at stake.
- A second lender or other creditor, to see whether the sale will leave anything after the first mortgage is paid.
- A court, if the price or a shortfall claim is disputed.
How an appraiser values a power of sale property
The method is the same as for any residential appraisal. The appraiser visits the home, measures it, takes photos and notes its condition. They then choose recent sales of similar nearby homes, adjust for the differences and weigh them to reach a value. The signed report states the purpose, the date of the value and who may rely on it, and is prepared under CUSPAP (Canadian Uniform Standards of Professional Appraisal Practice).
Condition and vacancy
Homes sold under power of sale are often vacant, and some need repairs or cleaning. The appraisal reports the home as it is, so the lender can set a realistic price and decide whether any work is worth doing before listing.
When the appraiser can't get inside
If the home is still occupied and access isn't possible, an appraiser can work from the exterior, records and photos, with the assumptions about the interior stated plainly. Limited access affects what the appraisal can cover, so mention it when you request a quote.
Exposure to the open market
Fair market value assumes the home is properly exposed to buyers. That is why lenders usually list a power of sale home on the open market at a price the appraisal supports, rather than selling quickly to a single buyer.
Selling under power of sale?
Your fee in writing within one business day, and most reports are ready 1–2 business days after the home visit.
Request a QuoteWhat if the sale price is questioned later?
If an owner believes the home sold too cheaply, which would increase the shortfall or shrink the surplus, the price may be disputed. A retrospective appraisal values the home as of the date of sale, using the sales and market conditions from that time, so both sides and, if needed, a court can see whether the price was fair. Read more about retrospective appraisals in legal disputes and our litigation and court appraisals.
Owners can order their own appraisal
You don't have to rely only on the lender's figure. An independent appraisal ordered by the owner gives you and your lawyer a supported value to compare with the lender's list price, and a clear number if you're trying to refinance or sell before the lender does. See the power of sale timeline and your options.
Why independence matters
An appraiser has no stake in the sale price and earns no commission. The report reflects the market evidence, whoever orders it, which is what makes it useful if the price is questioned later. Our reports are completed by appraisers designated by the Appraisal Institute of Canada.
How much does a power of sale appraisal cost?
At Best Home Value, power of sale appraisals start at $470 for a condo or townhouse and $575 for a detached or semi-detached house. A value as of a past date, such as the date of sale, costs more, because the sales from that time and the home's condition back then have to be pieced together. You'll have your exact fee in writing within one business day, before anything is booked, and most reports are ready 1–2 business days after the home visit.
Quick answers
Does a lender need an appraisal for a power of sale in Ontario?
A lender selling under power of sale must take reasonable care to get fair market value. The law doesn't spell out a specific appraisal, but lenders routinely get one or more independent appraisals before listing to show they met that duty.
Can the owner get their own appraisal during a power of sale?
Yes. An independent appraisal gives the owner and their lawyer a well-supported value to compare with the lender's list price, and a clear number if they're trying to refinance or sell before the sale.
Can a home be appraised as of the date of a power of sale after it has sold?
Yes. A retrospective appraisal values the home as of a past date, using sales and market conditions from that period. It's often used when a shortfall claim or the sale price is disputed.
What if the appraiser can't get inside the home?
Tell us about the access when you request a quote. Limited access affects what the appraisal can cover, and we'll explain the options and the fee before anything is booked.
Official sources
- Mortgages Act (Part III, Power of Sale), Ontario e-Laws
What happens next
- Request a quote. Tell us the address and why you need the appraisal.
- Get your fee in writing. Within one business day. Nothing is booked until you accept it.
- Home visit and report. We book a time that works for both of us, Monday to Saturday. Most reports are ready 1–2 business days after the visit.
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This article is general information, not legal or financial advice. Best Home Value provides appraisals; please speak with a lawyer about your situation.