Do You Really Need a Home Appraisal in Alberta? Sometimes Yes. Here’s When and Why

Appraisals: Why They Matter in the Alberta Market

When you’re buying a home, refinancing, or moving to Alberta from another province, there’s one step that sometimes catches people off guard: the home appraisal.

It’s easy to assume that if a property looks good and is priced right, it should all go through without a hitch. But in certain situations, lenders need more than just a good feeling, they need an expert’s opinion on the home’s market value.

Let’s break down when you need a home appraisal, how it works, who pays for it, and what it means for buyers, homeowners, and investors making moves in Alberta.

Buying With Less Than 20% Down? You Might Not Need an Appraisal

If you're putting less than 20% down, your mortgage is considered insured. That means a mortgage insurer, like CMHC, Sagen, or Canada Guaranty, steps in to cover the lender in case of default. Because the insurer takes the risk, they decide if they’re comfortable with the purchase price.

Most of the time, you won’t need an appraisal. If the insurer does want to double-check the value, they’ll order the appraisal and cover the cost. You’ll only be notified if it causes a delay, it often happens behind the scenes.

Putting 20% Down or More? An Appraisal Is Likely

Once you’re putting down 20% or more, your mortgage isn’t insured. The lender is on the hook if something goes wrong, so they usually want a full appraisal.

Here’s what that looks like:

• Your broker or lender orders the appraisal for you.

• You approve the fee, which ranges from $350 to $1,500 (or more).

• Even though you pay, the report belongs to the lender, not to you.

You’ll get the appraised value and basic info, but not the full document unless the lender chooses to share it.

Private Sales Always Require an Appraisal

If you're buying a home in a private sale, meaning there’s no real estate agent and it’s not listed on the MLS, you’ll always need an appraisal. This is true whether you're buying your first home in Edmonton or an acreage near Red Deer.

Lenders want to make sure the price reflects actual market value since there’s no public listing history to back it up.

Refinancing in Alberta? Expect an Appraisal

Whether you're consolidating debt, pulling equity to invest, or just locking in a better rate, refinancing typically involves a full appraisal.

Why? Because lenders must confirm you have at least 20% equity remaining in the property post-refinance. Even with excellent credit, this is a non-negotiable guideline in most cases.

When AVMs Might Be Used Instead

In some refinance or purchase situations, especially if you’re putting down 35% or more, lenders may use an Automated Valuation Model (AVM) instead of a full appraisal.

AVMs are software tools that estimate your home’s value based on comparable sales and market data. They’re quick and low-cost—but they’re only used when:

• You have a very low loan-to-value ratio

• Your property is in a well-established market

• The deal is low-risk and straightforward

If your home is rural, custom-built, or in a slower market, expect a full appraisal instead.

What Happens During the Appraisal Process

Whether it’s for a purchase or refinance, here’s how it works:

• Purchases: The appraiser contacts the seller’s agent to schedule access.
  Refinances: They contact the homeowner directly to book a visit.

• The appraiser visits the home, takes photos and measurements, and compares it to recent sales in the area.

• They send their report to the lender to support your approval.

What If the Appraisal Comes in Low?

Sometimes the appraised value is lower than the purchase price or what you expected during a refinance. This doesn’t have to be the end of the road.

If that happens:

• We’ll review the report and look for gaps or missing comparables.

• If there’s a strong case, we can dispute the value or request a reconsideration.

• Occasionally, a second appraisal might be an option if it makes sense to the lender.

While not every dispute is successful, we always advocate for our clients when the data supports it.

When You’ll Definitely Need an Appraisal

Here’s a quick breakdown of when appraisals are required in Alberta and who covers the cost.

Planning a Move or Refinance in Alberta? We’ve Got You Covered

Whether you’re relocating from BC or Ontario, buying a home for your kids, or investing in rentals around Lethbridge, Grande Prairie, or Calgary, knowing when an appraisal is required helps you prepare for the process with confidence.

Appraisals can affect your timeline and how much you can borrow, but they’re nothing to worry about when you’ve got a broker guiding you every step of the way.

Have questions about whether you’ll need an appraisal? Let’s talk.
Reach out at 587.370.4311 or email jarrod@mergemortgage.ca.