Building a property from the ground up can be one of the most exciting investments you’ll ever make, but it also comes with a unique set of financial requirements. For most borrowers, a construction loan is the lifeline that makes the project possible. Unlike a traditional mortgage, where you receive the full amount upfront, a construction loan is released in stages—each stage tied to the completion of a specific portion of the work. This is where a progress appraisal becomes essential, ensuring that both the lender and the borrower have a clear, accurate picture of the project’s advancement and value at every milestone.
In the Greater Toronto Area, where construction timelines can be impacted by everything from seasonal weather to supply chain challenges, a well-executed progress appraisal can make the difference between a smooth, timely build and a financing delay that halts work on-site. At IPS, we work closely with lenders, developers, and individual property owners to provide accurate, timely, and detailed progress appraisals that keep projects moving forward without unnecessary risk.
A progress appraisal is essentially an independent evaluation of the work completed to date on a construction project, measured against the original plans, permits, and budget. The purpose is twofold: to confirm for the lender that their funds are being used appropriately, and to reassure the borrower that they’re not overpaying for incomplete work. In the GTA, where real estate values are highly dynamic, progress appraisals also take into account any market fluctuations that could impact the property’s value at completion.
You will typically need a progress appraisal at each major draw stage of your loan. Most construction loans are structured in several disbursements—such as foundation completion, framing, roofing, interior work, and final completion. After each stage is reached, your lender will request a progress appraisal to verify that the work matches the approved plans and that the percentage of completion aligns with the amount of funds being requested. Without this verification, the lender may withhold the next payment, which can stall the project and create contractual issues with your contractors.
In the Toronto market, progress appraisals also provide an additional layer of protection against cost overruns and scope changes. Given the volatility of material prices and labour rates, a lender needs assurance that the remaining budget will cover the unfinished work. At IPS, we don’t just walk the site and take photos—we evaluate the quality of construction, adherence to local building codes, compliance with permits, and the realistic timeline for completion. This ensures that both the lender and the borrower have a shared understanding of where the project stands, financially and physically.
You may also require a progress appraisal in situations where the scope of the project changes mid-construction, such as an upgrade to higher-end finishes or an alteration to the building’s footprint. These changes can affect both the cost and the final appraised value, and the lender will want updated information before releasing additional funds. Similarly, if your project experiences significant delays—whether due to weather, supply shortages, or permitting issues—an updated progress appraisal will be essential to realign expectations and financing.
For borrowers, one of the most underestimated benefits of a progress appraisal is transparency. Construction projects can be complex, and it’s not uncommon for costs to creep up in ways that aren’t immediately obvious. Having an independent third-party like IPS evaluate progress ensures that you’re only paying for what’s been completed, and that the quality meets both your expectations and industry standards. This is particularly critical in high-value builds such as custom homes, commercial properties, and mixed-use developments in the GTA.
In the end, the best time to get a progress appraisal is not just when your lender requests one—it’s whenever there’s a significant milestone, change, or concern in your build. By engaging a professional appraisal firm like IPS early in the process, you set a clear benchmark for progress and value that protects you, your lender, and your investment from unforeseen setbacks.
In Toronto’s competitive real estate and construction landscape, staying ahead of potential financing hurdles is not optional—it’s essential. Progress appraisals are the bridge between construction reality and financial confidence, ensuring that your project moves forward with accuracy, accountability, and trust at every stage. And at IPS, we make sure that the bridge is strong enough to carry your vision from blueprint to completion.
