Short answer
The lender may calculate the mortgage from the lower supported value, leaving the assignee to bring more cash. The assignor may then face a price reduction, a failed assignment or continuing liability. Solve the valuation problem before removing financing conditions, not days before the builder closes.
The client problem behind the question
A 2021 contract price looked attractive when signed, but current comparable sales are lower. Adding an assignment premium makes the financing gap larger. Neither party has enough time to restructure after the appraisal arrives.
A practical Ontario example
Illustration only: The builder contract is $820,000, the assignment deal implies $850,000 and the appraisal supports $735,000. Even though the assignor already paid deposits, the assignee’s lender applies its loan-to-value rules to its accepted value. The parties must renegotiate, add cash or explore another qualified route; the assignment paperwork cannot erase the gap.
Questions Rajiv would ask before suggesting a route
- Which comparables and unit features drove the appraisal?
- Can factual errors be corrected or another appraisal ordered under lender policy?
- Does the project have a blanket-appraisal or approved-project program?
- How much additional cash is available and documented?
- If short-term financing is used, what event gets the borrower back to A or B lending?
Practical routes to compare
- Verify appraisal facts and project-specific lender programs.
- Renegotiate assignment consideration where the parties agree.
- Use equity from another property, a second mortgage or collateral support when suitable.
- Compare alternative, MIC or private funding with legal advice and a credible exit.
Keep the decisions separate
- Contract and liability: the builder agreement, assignment documents and written consent are for the real-estate lawyer to interpret.
- Marketing and price: a Realtor can assess comparable choices and work within builder restrictions.
- Mortgage: the lender decides acceptable value, income, credit, documents and funding structure. A regulator does not set that lender policy.
- Tax: an accountant or tax lawyer should confirm GST/HST, rebate and income-tax treatment from the actual facts.
Where A, alternative, MIC and private lending may fit
An A lender is normally the first route when income, credit, debt ratios, property and current value fit. Alternative lenders can take a broader view of income or property at a higher cost. A MIC is an institutional mortgage lender and may offer a six-to-twelve-month or longer term, interest-only or amortized payments, open or partially open features, and sometimes a maturity matched to the planned exit. A private lender may also bridge a closing. A short-term approval is useful only when the client can explain how it will be repaid through refinance, sale or other documented funds.
Verified fact and current limitation
TRREB reported a $634,972 average GTA condominium apartment selling price in Q2 2026, down 7.5% from Q2 2025, even as sales increased. This is a regional market snapshot, not the value of a specific unit; a lender-approved appraisal determines the file’s supported value.
Source checked 2026-09-03: read the primary source. Builder wording, lender policy, taxes, appraisal and market conditions must still be verified for the file.
Pressure-test the answer
The route can fail if consent is refused, marketing is restricted, the assignee cannot finance, the appraisal is low, payment timing is unclear, tax is larger than expected, documents expire or the assignor remains liable. Keep a closing fallback, calculate the worst cash requirement and involve the lawyer before a contractual deadline is missed.
Documents to gather now
- Original purchase agreement, disclosure statement, amendments and assignment clause
- Builder consent requirements, fee schedule and critical dates
- Deposit receipts, upgrade payments and 90-day source-of-funds history
- Proposed assignment agreement and payment schedule
- Current income, credit, liabilities and other-property details
- Comparable sales, appraisal and lawyer/accountant estimates when available
Related AskRajiv guidance
Continue with low appraisal builder condo financing deadline, pre construction appraisal shortfall closing options.
Get an assignment closing strategy
Use Rajiv’s direct mortgage strategy form. Include the builder deadline and the result you need: assign, close, rent, sell or arrange a short-term bridge.
Source and review
Reviewed by Rajiv Verma, Mortgage Broker on 2026-09-03. Educational information only; not legal, tax, appraisal, real-estate or mortgage approval advice.