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Many aspects of the homebuying process changed drastically due to the COVID-19 pandemic, but few have relied on such creative solutions as those employed for home appraisals.

In the early days of the pandemic, during the full lockdown, appraisers were prohibited from entering homes to do their jobs.

It was a major obstacle for an industry whose members rely so much on their senses to determine the true value of a property. A musty smell, for example, can lead an appraiser to poke around a little to potentially uncover a mould problem.

But the industry employed creative workarounds to keep conducting appraisals which, in some cases, are required by lenders before they can grant mortgage approvals (but not always).

Even when a formal appraisal isn’t ordered, there are a number of "behind-the-scene” assessments that take place to ensure a property is valued fairly. When a lender agrees to finance a purchase, you better believe they’re going to do some due diligence to ensure the home is worth the loan they’re about to grant.

That kind of assessment is typically done using the Automated Valuation Model (AVM). This involves computer programs that provide an analysis of real estate markets and estimated values by relying on public records, including municipal assessment data.

Substitutes for Physical Appraisals

For situations where an appraiser is required to do a physical assessment, or "full appraisal,” that’s where things got tricky.  

But lenders were quick to relax their policies—within reason—to facilitate new forms of appraisals.

Early on, two lenders, MCAP and RMG, for example, approved modified full appraisals by allowing appraisers to rely on virtual inspections completed by the customer by various means.

Merix Financial President Boris Bozic said earlier in the year that they too "fully embraced the ‘peekaboo’ approach to assessments.”

That approach included everything from appraisers peeking through windows to see the interior of a home, to equipping homeowners with cameras, who were then able to provide appraisers with a guided virtual tour of the home.

Where Things Stand Today

The Appraisal Institute of Canada is still recommending limited interpersonal contact for its 5,000+ members for the "foreseeable future.”

However, since the lockdown ended, appraisers have had the option of going back inside homes to conduct their full appraisals as long as they follow public health guidelines, including social distancing and mask wearing.

"I’ve been pleased with how we’ve been able to help our members adapt and support them throughout the process,” AIC President Keith Lancastle told the Canadian Real Estate Association recently. "If we would not have had the ability to adapt, things would have been remarkably different.”

If you are thinking about entering the housing market, a TMG mortgage broker can help you understand your financing options, and further explain the appraisal process.