The short answer is borrower. Usually twice.
The long answer gives you a little more insight as to why.
A home appraisal is a necessary part of buying a home. Appraisals are professional estimates of a home’s value that take into account its layout, condition, size, appearance, and location. When you seek a mortgage, the lender will order an appraisal of the home at your expense.
However, this appraisal is designed to protect both the lender and the borrower from putting money into a bad property.
Obviously, the lender does not want to be stuck with a foreclosed house once the borrower realizes it is not worth as much as the mortgage. Yet the borrower also does not want to be stuck with a low-value house.
The lender-ordered appraisal is a crucial protection for both parties. After receiving the results of the appraisal, the lender can discuss with you whether they believe your mortgage is a good idea.
The downside for borrowers is that they will not always have access to the appraisal data. Some lenders prefer to keep the data to themselves instead of sharing it with mortgage brokers or borrowers.
Accordingly, it is a good idea for borrowers to commission their own appraisal when making offers. This gives borrowers more information and bargaining power, and is especially important to avoid getting fleeced in a bidding war.
An appraisal will cost between $300 and $500 for a single-family home. Multi-unit properties will cost more, typically over $1000. HST or other value-added taxes apply.
This is a drop in the bucket compared to the money you could lose from buying a property without an appraisal.
A number of hidden problems in a property, like mold in the walls, failures in the vapor barrier, poor energy efficiency, cracked foundations, or faulty septic tanks can end up costing tens of thousands of dollars down the road. On top of those issues, general overvaluing of a property can bilk you out of thousands.
An appraisal lets you know not only what a house’s value is, but also exactly why the value is high or low. This lets you plan your early repairs and renovations, and gives you a better idea of the mortgage funds you need.
Choosing an Appraiser
The most reliable appraisers are licensed Canadian Residential Appraisers licensed by the Appraisers Institute of Canada. A licensed CRA will provide you with a much more reliable understanding of your home’s value and condition.