Can you tell me more about the difference between a comparative market analysis, opinion of value, and an appraisal?

A few weeks ago I wrote a column that touched on the difference between an appraisal and a comparative market analysis (CMA) — two ways to determine what a home is worth.

Since then, I’ve been asked for more information about how they differ, and how an opinion of value letter fits in to that mix.

All three provide information about the value of a property. But typically the process and steps taken for an appraisal are more extensive and formal.

As part of their analysis, an appraiser will visit your home to look at aspects of the property that would influence its value, including its size, design, finishes, systems, the quality of any improvements, lot size and any amenities, deficiencies or required repairs.

The appraiser will then research comparable properties that have recently sold or are active in the area. With that information in hand, they’ll focus on the most comparable sold properties and make calculations to account for the differences between those properties and your home. That information plus data on general market conditions will then allow them to provide an appraised value for your home.

They’ll also produce a detailed report with their analysis. The appraisal report may also contain a summary of the appraiser’s qualifications and any limitations of the report. When disputes arise about the value of a property and end up in court, typically an appraisal is required.

A CMA on the other hand is less formal and done by a real estate broker or salesperson. As with an appraisal, your broker or salesperson will obtain sales and available property data for similar properties in the area. The CMA would typically help you compare similar properties and suggest a range for the potential value for your home. This can kick off a discussion between you and your salesperson about your listing price and sales strategy.

A broker or salesperson may also provide a letter that briefly provides their Opinion of Value in written form. The opinion of value typically contains less background information than you would receive from a CMA.

In many cases, a CMA or an opinion of value may provide the detail that a seller needs to set an asking price and review any offers that come in. If you feel like you don’t have enough information, you should ask your representative to provide more detail, or consider getting a formal appraisal.

It’s important to note that only a qualified appraiser can conduct an appraisal for you. That means holding a designation from the Appraisal Institute of Canada or the Canadian National Association of Real Estate Appraisers. Some real estate professionals are also qualified appraisers, so it may be a service that your broker or salesperson offers. Note that you will likely have to pay for the appraisal if it’s not a service that’s included in your listing agreement.

Whether the market is up or down, sometimes it can be tough for sellers to understand what their property is worth. A CMA or an opinion of value can all provide useful information to kick off the selling process. If you need more info, a full appraisal can provide an in-depth analysis.

Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at, follow on Twitter @RECOhelps or on YouTube at

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