I have heard a lot of talk about property assessments, appraisals, and comparative market analysis.

The two things every home owner always wants to know are… How is the market? And what do you think my home is worth?

I’ve heard these terms used interchangeably quite often, yet they are all quite different and would all result in a different value for the exact same subject property. In other words, your home.

So it ultimately begs the question… What is your home really worth?

Today I will explain exactly what the difference is between these three terms.

“Property Assessments” are done by the tax department of your local municipal government.
They are done for the purpose of assessing your property for property tax purposes.

They have a method of calculating the value of your home as per their requirements, and then they will apply their own formulas to calculate what your property taxes will be.

An “Appraisal” is done by a certified appraiser.
I often get people saying “Michael, we are thinking of selling so can you give me an appraisal of what our house will sell for?“

Or some other times I hear “Michael, can you give me an assessment of what our house will sell for?”

Certified Appraisers are generally hired by the banks because the banks want to know that they’re not lending more money to you in the form of a mortgage, then the amount that the house is actually worth.

That’s because they always want to make sure that if for some reason you don’t pay the mortgage then they can at least sell the house and get back the money owed to them without losing money.

So generally, we find that the amount your home is “appraised“ at might be a little less than fair market value and they do tend to err on the safe side in order to make sure the bank is protected.

Now to explain the third term that we often hear.
Often you will see postcards in the mail or bus benches where Realtors will say “Free Home Evaluation“, or “C.M.A.“, or “Comparative Market Analysis.“

These terms mean that the Realtor will look at comparable properties in your comparable areas, so that if you’re thinking of selling, what you really want to know is what your house will sell for?

In other words, what will the buyers pay in your specific area for your specific type of house with your specific features?

So a comparative market analysis is where we look closely at other properties which are as close to the same type and features and size of property that you will be selling.

Often a neighbourhood will have the same model owned by three, four, or five different people and scattered throughout the area.

So we want to find other similar properties as close to your street and in your subdivision as possible.

Similar type of house, with a similar type of upgrades, and then we look at what have they sold for recently, so that we can do a thorough comparison.

Maybe they had “this“ upgrade but you have “that“ upgrade.

Or you have the same house model with a finished basement but the comparable sale didn’t have a finished basement.

Or the other house had an additional four washroom in the basement that was added, and a pool in the backyard, where as your property might not, or vice versa.

And based on our calculations, we can determine what would be a realistic asking price and what can we expect to sell your property for if you were to list your house or condo for sale at this time.

Hopefully this clarifies these three terms for you.
But if you would like to know more about the value of your home, or the market in your area, please don’t hesitate to contact me personally and I’d be happy to give you some customized numbers specifically for your house.