Market analysis, an appraisal, and an assessment, what’s the difference?

Tuesday, March 19, 2019 Written by Emmanuelle in Real Estate industry

I often have clients wondering: what is the difference between a CMA (Comparative Market Analysis), an Appraisal or an Assessment?

As a registered real estate broker I can provide you with a
market analysis – sometimes called a comparative market analysis or an evaluation of the property - , which is the method that is most commonly used when you are willing to have the current market value of your property.

First of all, we compare your home to
similar properties that have recently sold in your area. We will:

  • perform a thorough inspection to find features that could set it apart from other homes on the market;
  • take into account factors such as upgrades to the home and significant fixtures that will remain in place, and examine items that need to be addressed or repaired.

In addition, I always take into account the opportune moment, according to the competition in the market. Finding the best time to put your house up for sale can make all the difference. A market value is always flexible depending on supply and demand.

An Appraisal is a more formal method of determining a home’s value than a CMA. An appraiser will start with the same information that’s used to create a CMA, but then take a more detailed look at a myriad of factors that may affect the property’s value. An Appraisal to me provides you with more of an inner value of the property.

Appraisals are usually performed at the request of financial institutions before they provide mortgages to would-be home buyers. They’re also used in divorce cases and other legal disputes when a fairly precise valuation of a property is required, or in the course of the settlement of an estate.

Only a qualified appraiser can conduct an appraisal in Ontario, that means holding a designation from the Appraisal Institute of Canada or the Canadian National Association of Real Estate Appraisers.

Assessments are completed by the Municipal Property Assessment Corporation (MPAC) on behalf of the provincial government and are only used to calculate a homeowner’s property taxes. An assessment may not capture the nuances that make your property special or be as current as you need it to be and are in most cases far away from a market value.

To conclude, there is a value, which is often forgotten, that of emotional value. For me your memories are priceless, they are much too precious to be given a value.