People usually meet an appraiser at two moments: when things are moving forward, or when something feels stuck. A sale, a refinance, an estate settlement, a divorce, a portfolio review, a redevelopment idea. The valuation becomes the anchoring number that every other decision or negotiation or approval or lawsuit or mortgage depends on. As a real estate appraiser, I am paid to be independent and exacting, and to put reasons behind numbers. The questions below come up over and over, whether I am doing a residential property appraisal, a commercial property appraisal, or broader real estate advisory. The details are written from hands-on work, including years in and around London, Ontario, where local licensing for real estate appraisers context often matters as much as textbook method.
What does an appraiser actually do?
An appraiser provides an unbiased estimate of market value for a specific property, as of a specific date, for a specific use. It sounds simple, yet every word in that sentence carries weight.
Unbiased means the appraiser is independent. If a bank hires me to value a mixed-use building, I do not advocate for the borrower or the lender. I interpret evidence and explain my reasoning. Market value is not a guess or a wish. It is a defined concept usually based on an arm’s-length transaction between a willing buyer and seller, both informed, neither under duress, and with reasonable exposure time. Specific property means I analyze the real-world asset, not a theoretical version of it. I walk it, measure it, photograph it, ask questions, check permits and plans. Specific date matters because markets move. A valuation pegged to last June’s conditions may not hold after a rate change or a significant local development announcement. Specific use shapes the scope. A mortgage valuation for a single-tenant warehouse calls for a different depth than litigation support for a long-running land dispute.
The deliverable is typically a report with narrative analysis. Behind the scenes are data collection, verification with market participants, model building, and cross-checks. In residential work, standardized forms are common. In commercial property appraisal, narrative reports can run dozens of pages, with sales grids, income statements, lease abstracts, and cost analyses.
How is value determined? Three classic approaches, one reconciled conclusion
Most valuations start with three classic approaches, then reconcile to a final number. Not every approach will be relevant every time.
The sales comparison approach compares the subject to recent sales of similar properties, adjusting for differences in size, condition, age, location, and features. It is strongest when comparable sales are plentiful and transparent. In a London, Ontario residential neighbourhood where five bungalows sold in the last six months within a kilometre, this approach can carry the day. The art is in the adjustments. You do not add the full cost of a new kitchen to a dated house; you reflect contributory value, which may be much less than the owner spent.
The income approach capitalizes the property’s income stream into value. It is foundational in commercial property appraisal. For a multi-tenant office building, I analyze leases, market rents, vacancy, operating costs, and capital expenditures. The direct capitalization method divides stabilized net operating income by a capitalization rate derived from market evidence. The discounted cash flow method projects income and costs over a holding period, then discounts those cash flows to present value, accounting for leasing downtime, re-leasing costs, rent steps, and an exit cap. A single-tenant industrial building in south London with a five-year leaseback to a local manufacturer prices very differently from a similar shell standing vacant two blocks away. The lease covenant, renewal options, and tenant improvements all feed into risk and, ultimately, value.
The cost approach estimates what it would cost to replace or reproduce the improvements, less depreciation, then adds land value. It can be useful for newer assets or special-purpose properties with limited comparable sales, like a purpose-built medical clinic or an ice rink. For older buildings with substantial functional or economic obsolescence, the cost approach often becomes a secondary check since depreciation is hard to pin down with precision.
Reconciliation is the final judgment call. If the subject is an income property with solid leases and a deep market for investor sales, the income approach likely gets the most weight. If I am valuing a single-family home in a tract with frequent sales, the sales comparison approach leads. The report explains not just the math, but why one approach deserves more weight than another.
Why do two appraisals sometimes disagree?
People expect a single correct number. Real estate is not that tidy. Appraisers work from different data sets and can reasonably disagree on the interpretation of the same fact pattern.
Timing matters. A report effective in March will see a different interest rate backdrop and buyer sentiment than a report effective in September. Data depth varies. One appraiser might interview the listing agent on a sale, learning about a roof allowance or a vendor take-back mortgage that shaped the reported price. Another might miss that nuance and adjust differently. Scope and mandate also shape outcomes. A portfolio valuation for financial reporting can reasonably reflect a different level of granularity than a single-asset appraisal for a purchase decision.
When I review divergent appraisals, the answers usually lie in the comparables chosen, the adjustments made, or the income assumptions adopted. If two residential appraisers value the same home and come in five percent apart, both can be defensible. If they are twenty percent apart, someone’s assumptions or data need scrutiny. In commercial, a 50 basis point difference in the cap rate can swing value meaningfully. The best path is transparency. A credible report lays out assumptions clearly enough that a reviewer can follow the logic.
How do you pick comparables?
In residential work, I start close in and recent, then step out in small increments if needed. A good comp shares key features like housing type, gross living area, age, lot size, condition, and location characteristics. If the subject is a two-storey, brick house built in 1998 with a finished basement in north London, I prefer similar homes sold in the past three to six months within a couple of kilometres, adjusting for size and finish. Older or farther sales are fine if the market has been thin, but I flag the limitations.
In commercial property appraisal, the word “comparable” expands. I care about income comparables for rents, expense ratios, tenant inducements, and lease-up durations, as well as sale comparables for cap rates and price per square foot. A national-credit lease to a pharmacy in a neighbourhood plaza cannot be equated to a start-up gym, even if both pay similar base rent, because credit risk and re-leasing prospects differ. A wise rule: compare what the market compares. Investors in southwest Ontario often speak first in terms of cap rates for stabilized assets and price per square foot for owner-occupier industrial. I listen to that language and align evidence accordingly.
What affects value the most?
Location still dominates, but you have to drill down to what location means in practice. In London, Ontario, proximity to strong schools can add real dollars to a house value, while proximity to a heavy truck route can subtract them. Access to Highway 401 or a rail spur drives industrial value more than frontage on a pretty street. For retail, anchor strength and co-tenancy matter as much as daily traffic counts.
Condition and utility are next. A home with good bones, sound systems, and a practical layout will hold value through cosmetic trends. An office building with efficient floor plates and modern elevators will command better rents than a quirky space that looks interesting in photos but frustrates tenants in daily use. In industrial, clear height, loading configuration, and power supply rank above finishes.
Income durability typically drives commercial value. A long-term lease with a strong covenant and structured rent escalations can elevate value beyond what a shorter lease at slightly higher rent would support. Expense pass-throughs, capital intensity, and exposure to single-tenant risk also weigh heavily.
Supply constraints amplify everything. When vacancy rates dip below two percent in a specific industrial submarket, seemingly small differences, like an extra truck court depth or additional trailer parking, start to price aggressively. On the residential side, tight inventory magnifies the premium for a renovated kitchen in a sought-after pocket, although markets can cool faster than sellers expect when rates rise.
How long does an appraisal take?
For a typical residential property appraisal used for mortgage financing, the process usually takes three to seven business days from inspection to final report, assuming easy access, cooperative scheduling, and straightforward comparables. Rush jobs happen, but shaving too much time can increase the risk of missing a nuance that matters.
Commercial property appraisal timelines vary widely. A small, single-tenant industrial condo might be turned around in a week or two, provided leases and financials arrive promptly. A multi-tenant office or retail plaza with complex leases, historical capital projects, and environmental considerations can take three to five weeks. If the engagement is a formal litigation assignment or a portfolio valuation in multiple municipalities, build in more time for document review, interviews, and internal peer review.
The biggest variable is information flow. When a client delivers rent rolls, leases, TMI reconciliations, operating statements, and capital expenditure logs at the start, the work accelerates. When those trickle in piecemeal, the schedule stretches.
What should I do to prepare for an appraisal?
I like to say that perfect housekeeping does not add fifty thousand dollars to your value, but clarity and documentation can avoid unnecessary deductions. Have a short packet ready: recent improvements with dates and costs, permits or approvals for additions, a list of known issues, and for income properties, current leases and operating statements. If you finished a basement in 2022 with permits, show the permit closeout. If a roof leaked last winter and was repaired, provide the invoice. Appraisers do not need staged flowers, but we do need access to all rooms, utility areas, and, where applicable, the roof and mechanical spaces. If something cannot be accessed safely, I will have to qualify the report or return, and both can delay outcomes.
Sellers and lenders sometimes ask whether cosmetic work before the appraisal will boost the number. Small repairs that change a buyer’s first impression can have an outsized effect, particularly in residential appraisals that lean on sales comparison. Fix the broken window latch, patch and paint obvious damage, and replace burnt-out bulbs. On the commercial side, tidying up housekeeping, ensuring all lights are working, and aligning signage does not change income, but it helps an appraiser form a cleaner view of quality and tenant pride, which can affect the risk lens on vacancy and tenant turnover.
How much does an appraisal cost, and why do fees vary?
Fees reflect scope, complexity, and liability. A straightforward residential appraisal is often a few hundred dollars. A customized report for a high-value home or unique rural property can be more. Commercial property appraisal fees typically start in the low thousands and rise with complexity, property size, and report type. A stabilized, single-tenant industrial building might be priced at one level, while a downtown office tower with 30 leases, a parking structure, and phased capital projects will require a much deeper dive, more modeling, and more analysis of market risk, leading to higher fees.
Turnaround pressures and specialized requirements also influence fees. A rush assignment or one demanding court testimony, valuation for expropriation, or IFRS/ASPE financial reporting calls for additional time, documentation, and, sometimes, expert-witness preparation. In some markets, including London, Ontario, strong demand for industrial and multifamily appraisals can tighten appraisers’ schedules, and fees reflect that bottleneck.
When is a real estate advisory engagement better than a straight appraisal?
An appraisal answers “what is it worth today, under this definition of value.” Real estate advisory widens the lens. If a client asks whether to convert a vacant office into apartments, whether to subdivide a parcel, or how to reposition a tired retail strip, they do not just need a number. They need scenarios, feasibility analysis, sensitivity to costs and rent levels, and an honest conversation about execution risk and timing.
Advisory assignments often involve highest and best use analysis beyond a single snapshot. For example, a landowner near London might want to understand the value difference between selling immediately for agricultural use versus holding through servicing and zoning for low-rise residential. Advisory work can include residual land value modeling, phasing, absorption studies, and consultation with planners and engineers. The output is not just a value conclusion, but a strategy supported by numbers.
Clients sometimes blur the two. If you only need to refinance an existing property, an appraisal is your tool. If you are deciding whether to build, sell, hold, or re-tenant, or if the property is unusual or in transition, a real estate advisory mandate usually delivers more utility.
Do appraisers use automated valuation models?
Automated valuation models, or AVMs, have become common in residential lending for low-risk, low-loan-to-value refinances where the property is typical and data is abundant. They are fast and cheap. They are also blunt. AVMs work best on homogenous housing stock with deep sales data. They stumble on custom homes, rural properties, renovations with unpermitted work, or in markets with thin sales.
In commercial property appraisal, automation helps with data organization and market surveillance, not with final value. Lease terms, tenant covenants, renewal options, expense stops, deferred maintenance, and co-tenancy clauses change value in ways that require judgment. I use software extensively, but only as a tool. The report stands on verified data and professional reasoning.
How do rising interest rates affect value?
Higher interest rates ripple through every valuation approach. On the income side, capitalization rates tend to expand to reflect higher required returns, so a given net operating income capitalizes into a lower value. Debt service coverage ratios tighten as mortgage payments increase, which can reduce the price investors are willing to pay if they rely on financing. On the residential side, higher rates reduce the mortgage a typical buyer can carry, which often translates into softer sale prices unless supply shrinks enough to offset the demand hit.
The effect is not one-size-fits-all. In London and across southwestern Ontario during periods of rate jumps, industrial assets with short-term supply constraints sometimes held pricing better than office assets wrestling with structural demand shifts. Long leases with indexed rent escalations can cushion the blow, while flat leases to weaker tenants can get repriced quickly by the market. Timing again matters. Appraisals date-stamp this context.
What role do environmental and building condition issues play?
Environmental flags can be value killers or manageable speed bumps depending on severity and phase of investigation. A gas station site with known contamination and an outstanding risk management plan will see valuation adjustments for remediation costs, stigma, and financing friction. A manufacturing plant with historical use of solvents should trigger at least a Phase I Environmental Site Assessment, and if that flags recognized environmental conditions, a Phase II might follow. When I appraise, I rely on available reports and adjust for known and reasonably foreseeable costs and risks. Unknowns may lead to extraordinary assumptions or hypothetical conditions in the report. Lenders respect clarity on these points.
Building condition issues land differently but still count. A roof near end of life, failed chillers, spalling in a precast façade, or elevator modernization needs all translate into capital expenditures. In income valuations, I model those as capital reserves or one-time deductions, then assess how they might affect leasing, downtime, and rent levels. Buyers do the same math. A clean building condition assessment handed over early keeps surprises out of the eleventh hour.
How is a commercial property appraisal different from a residential one?
The differences run deeper than page count. Residential appraisals serve mortgage lending, estate, or sale decisions for properties where emotional utility and comparability dominate. The sales comparison approach does the heavy lifting, and standardized forms keep reporting consistent.
A commercial property appraisal is more bespoke. Every rent roll is its own ecosystem. Lease clauses about percentage rent, assignment, demolition, co-tenancy, or renewal rights change value. The local tenant mix, anchor strength, and nearby developments matter. Expense recoveries hinge on lease structures: net, net-net, triple net, or gross. Capital expenditures are endemic, not episodic. Investors judge risk through cap rates, discount rates, and reversion assumptions shaped by leasing prospects and exit liquidity. The report must tell this story coherently.
What happens after the appraisal is delivered?
With a mortgage-related residential appraisal, the lender reviews the report, sometimes through an appraisal management company, checks for completeness, and either accepts it as is, asks questions, or, rarely, orders a review appraisal. Buyers and sellers may never see the report unless they paid for it directly.
With commercial property appraisal, the client often engages in a feedback loop. They may point out a missed lease amendment, a corrected expense reconciliation, or a sale comp the appraiser did not include. A good process allows for factual corrections and clarifications. The value may or may not change depending on the significance of the new information. For advisory assignments, delivery is usually followed by a working session to press on assumptions and test sensitivities.
Can I use one appraisal for multiple purposes?
Sometimes, with caution. A valuation for mortgage financing might serve you in negotiations if the effective date and scope are current and relevant. But if you need the report for litigation or for financial reporting, the standards, scope, and certifications often differ. Courts demand different language and, at times, expert-witness availability. Accounting standards may require specific definitions of value and assumptions.
If you are in London, Ontario and planning to use one commercial property appraisal both for refinancing and municipal submissions tied to development charges or severance applications, say so at engagement. Scope can be set up to meet multiple needs, but only if those needs are known up front.
How much does local knowledge matter?
A lot. Real estate is intensely local. Within London, west of Wonderland differs from east of Highbury in buyer demographics and price sensitivity. Access to bus rapid transit corridors, the details of school catchments, the location of new industrial parks along Veterans Memorial Parkway, and the permitting culture of specific municipalities around the city all shape market behaviour.
A real estate appraiser based outside the region can still do competent work with strong research, but local appraisers and firms offering real estate advisory in London, Ontario will likely know which planned projects are more than talk, how quickly certain submarkets absorb new product, and which comparables carry hidden wrinkles. I still call brokers, property managers, and municipal staff to ground-test my assumptions. A number built only from databases tends to miss where the market is actually moving.
What is highest and best use, and why does it matter?
Highest and best use is the reasonably probable use that is legally permissible, physically possible, financially feasible, and maximally productive. It matters because the market pays for potential, not just for what exists. A single-storey commercial building on a corner lot zoned for mid-rise residential might be worth more as a development site than as a going-concern retail strip, even if the current rents look decent. Conversely, a property that seems ripe for redevelopment may stumble on parking requirements, servicing limits, or heritage overlays, which push the feasible use back to its current form.
In practical terms, I do not jump to the sexy answer. I test zoning, talk to planners, check servicing, and run residual land value models that incorporate realistic construction costs, soft costs, contingencies, developer profit, and time. In London, infill sites near transit corridors face real competition from greenfield development at the city’s edge. Absorption rates and unit pricing assumptions must pass the sniff test. If the numbers do not support change, the highest and best use at the time of valuation may remain the current use, perhaps with incremental improvements.
What if the appraisal comes in “low”?
First, verify the facts. Did the appraiser capture the right gross living area, the correct lot size, the right number of parking stalls, the updated lease amendment with the rent bump? Corrections sometimes resolve mismatches. Second, assess the comparables and adjustments. If a key sale was a distressed transaction or had unusual vendor incentives, it might deserve less weight or a different adjustment.
If the facts are sound and the analysis is competent, then the outcome might be telling you something about the market rather than about the report. Prices can run ahead of value during bidding frenzies. In commercial deals, buyers underwriting very low cap rates or optimistic lease-up timelines may be pricing in synergies or risk appetites that the broader market does not share.
If you disagree with a report, you can request a reconsideration of value with new evidence or commission a second appraisal. Lenders will consider new data, but they generally will not move the goalposts without credible grounds. In the meantime, parties can adjust price, terms, or financing structures to bridge the gap. Earnest money, holdbacks, vendor take-back mortgages, or conditional periods for lease-up are common tools.
What standards do appraisers follow?
Professional appraisers in Canada typically adhere to the Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP), which set out ethics, scope, reporting, and review requirements. Many also align work to client standards, such as those of chartered banks, insurance companies, or public entities. For international assignments or cross-border clients, International Valuation Standards (IVS) may be required. Standards govern not just the final report, but also file retention, disclosure of extraordinary assumptions and hypothetical conditions, and conflict-of-interest management.
When you hire a real estate appraiser, ask about credentials, designations, and experience with your property type. In London, Ontario, a commercial assignment ideally goes to someone who regularly values that asset class in the region and understands its micro-markets.
What should I look for in a good appraisal report?
Clarity, transparency, and support. You should see the property described in enough detail to understand what was valued and under what assumptions. The selection of comparables should make sense, with adjustments that are explained rather than asserted. Income statements should tie to leases and market evidence, with cap rates supported by sales and interviews. The highest and best use conclusion should be reasoned. Assumptions and limiting conditions should be spelled out in plain language. And, importantly, the effective date should be unambiguous.
A readable report respects your time. Jargon is sometimes unavoidable, but definitions help. Tables and exhibits should illuminate the argument, not just pad the page count. If you finish the report and can explain to a colleague why the value is what it is, the appraiser did the job.
How can a property owner improve value over time?
There is no magic lever, but small, consistent decisions compound.
- For residential owners: maintain the envelope and systems, keep layouts functional, upgrade kitchens and baths in line with neighbourhood norms, document permits, and pay attention to curb appeal. For commercial owners: pursue quality tenants, structure leases with sensible escalations and recoveries, keep capital projects proactive rather than reactive, and invest in energy efficiency where payback is credible. Track your numbers and tell your property’s story through clean financials and organized lease files.
Owners who measure performance make better decisions. In a tight industrial submarket, converting underused yard space into additional trailer parking can unlock rent growth. In a retail plaza, re-tenanting from a weak category to a service that drives daily trips can stabilize income. Strategic moves show up in valuations, and they hold through cycles better than cosmetic plays.
When does a valuation need to be updated?
Any time a material change occurs. New leases or major lease expiries, a significant capital project, a change in zoning or permitted use, a shift in market vacancy or cap rates, or a funding event like refinancing or partnership restructuring all warrant a fresh look. Lenders often require updates annually for income-producing assets. For owner-occupied real estate, a three-year cycle can be sensible, unless the market is moving faster or you plan to transact.
If you are running a portfolio or working with a family office, involve your appraiser and your real estate advisory team early when contemplating big moves. Scenario testing before you commit can catch pitfalls and reveal better options.
Is there anything unique about valuing property in London, Ontario right now?
Local currents matter. Industrial land and small to mid-bay industrial product have been in high demand, driven by logistics, light manufacturing, and spillover from the GTA where costs run hotter. Vacancy has been tight, and construction costs have forced careful pro formas. Multifamily demand has stayed resilient, but rent control, building code changes, and construction inflation demand sharper pencils. Office continues to sort by quality, with well-located, efficient buildings faring better than dated product. Retail varies by node, with grocery-anchored and service-oriented strips performing more predictably than fashion-heavy centres.
On the residential side, detached homes in established neighbourhoods with strong schools remain liquid, though pricing sensitivity tracks interest rates closely. New subdivisions on the city’s edges compete with infill supply, and buyers scrutinize finishes and layouts more than they did during frothier periods.
If you need a property appraisal in London, Ontario, look for a practitioner who can speak concretely about these headwinds and tailwinds, not just recite national headlines. The better the local fit, the better the valuation.
Final thoughts, and how to get more from the process
Valuation is not a black box. Treat your appraiser as a professional counterpart rather than a hurdle. Provide clean information early, state your purpose clearly, and ask for a short call to walk through assumptions if something is unclear. For complex or transitional assets, consider a real estate advisory scope first, then move to appraisal when the strategy is defined.
If you are searching for a real estate appraiser in London, Ontario, or you need commercial property appraisal or broader real estate advisory, bring your questions. The right questions improve the answers. And in this business, good answers unlock money, time, and options.