How We Approach Property Valuation in Private Lending
At Assadi Private Capital, accurate and independent property valuation is a critical part of our underwriting process. As a direct private lender focused on asset-based lending, we rely on third-party appraisals to determine the current market value of a subject property and to ensure that our lending decisions are supported by defensible collateral data.
This document outlines our appraisal standards, including who commissions the appraisal, how long they remain valid, what types of reports we accept, and how we approach valuations in more complex scenarios.
Full Appraisals Required
We require a full appraisal on every file. Drive-by or desktop-only reports are not acceptable substitutes, regardless of location, borrower profile, or perceived equity. Our goal is to make lending decisions based on the property’s actual physical condition, neighbourhood context, and market comparables, all of which require a comprehensive site inspection.
Lender-Commissioned Appraisals Only
Appraisals must be commissioned directly by Assadi Private Capital, not by brokers or borrowers. This ensures the independence and objectivity of the report and allows us to maintain full control over scope, instructions, and report format.
We coordinate directly with appraisal firms across Canada and are happy to arrange for appraisals to be conducted promptly following a term sheet being issued.
Accepted Appraisers and Designations
We work with experienced, provincially licensed appraisers across the country. While we maintain relationships with many local professionals, we are open to working with other reputable firms, provided that:
• The appraiser holds a recognized designation such as CRA (Canadian Residential Appraiser) or AACI (Accredited Appraiser Canadian Institute), and
• The appraisal conforms to industry-standard practices and includes comparable sales, market commentary, interior and exterior photos, and reconciliation of value.
Appraisal Validity Period
All appraisals are considered valid for a period of 90 days from the date of inspection. After this time, a new report, or at minimum, an update from the original appraiser, may be required.
Value Basis: “As-Is” Market Value
Appraisals must reflect the “as-is” market value of the property as of the inspection date. We are not interested in future, hypothetical, or “subject to repair” values. The report must indicate what a willing buyer would reasonably pay for the asset in its current condition and context.
This standard applies particularly in files involving:
• Vacant or underutilized properties
• Fire- or flood-damaged assets
• Properties under construction or partial renovation
• Non-conforming or distressed real estate
Valuations should not assume future improvements, new tenancies, or unrealized upside unless specifically requested.
Borrower-Commissioned Appraisals
While we prefer to commission appraisals ourselves, we may consider accepting a borrower-provided report in certain cases, provided that:
1. The appraiser is willing to re-issue the report naming Assadi Private Capital as the client or an authorized user;
2. The report is recent (within 30 days), well-documented, and meets our content and designation standards;
3. There are no perceived issues of bias or advocacy.
This decision is made at our discretion and may require additional due diligence.
Appraisal Cost Responsibility
Unless otherwise specified, the cost of the appraisal is borne by the borrower as part of the closing expenses. We are transparent about this during the commitment stage and include appraisal fees in our loan offer letters as part of the estimated funding costs.
Conclusion
Appraisals are central to our risk management process. They allow us to evaluate the underlying security with confidence and protect both ourselves and the borrower from entering into a transaction based on inaccurate assumptions. We encourage brokers, lawyers, and other professionals to align early with our valuation standards when preparing a submission.
If you have questions about our appraisal process or would like to pre-qualify a local appraiser in your area, please contact us directly.