What’s the difference between a market analysis, an appraisal, and an assessment, and which one should I use to set a listing price when I sell my home next year?

As soon as you’re ready to start the process, I strongly recommend working with a registered real estate salesperson or broker who 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 by sellers when they want to get a sense of what their home is worth and then set a listing price.

An experienced salesperson should be able to calculate the approximate current market value of the home by comparing your home to similar properties that have recently sold in your area, and by doing a thorough inspection to find features that could set it apart from other homes on the market. They’ll consider 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.

Sellers often worry about setting a listing price that will suit their needs and still attract buyers. That’s one reason why it’s a good idea to interview at least three salespeople, and ask each of them about their approach to evaluating properties before you sign an agreement with a real estate brokerage.

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, such as its age, design, square footage, location, overall condition, lot size, construction materials, quality of finishes, and improvements made, to name just a few.

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.

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. Some real estate salespeople are also qualified appraisers and some brokerages offer the service. If you want the brokerage to perform an appraisal, check your listing agreement to see if it’s included or if you’ll have to pay extra money.

You also mentioned assessments in your question. 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.

If you have a question for Joe about the home buying or selling process, please email information@reco.on.ca.


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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 reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.

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