Toronto real estate values are top of mind for many people, and not just for those thinking about buying or selling a home. If you’re a current homeowner, you might need an approximation of value for any number of reasons. 

You might be planning on some significant renovations. An estimation is essential so you can budget those improvements, especially if you need to borrow funds to make them happen. Or, you may be in the midst of a divorce or separation, where an appraisal is required for one spouse to buy out the other. 

The next question is where to go from here. A quick internet search sometimes just adds to the confusion. Do you need a home evaluation, an appraisal, or an assessment? In this post, we’ll talk about the difference between all three and what each means for your situation. 

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What Is a CMA in Real Estate?

As real estate agents, CMAs are close to our hearts. It stands for Comparative Market Analysis, and this is where we shine. We take a careful look at your home and then analyze its attributes using various reports and relevant statistics.

A CMA first evaluates the size, structure, age, condition, and location of your house, then compares it with other similar properties that are on the market or have recently sold. In some ways, there is a lot of math involved. However, much of this analysis comes down to years of experience and intuition as to what number best reflects the current market. 

You may also hear CMAs referred to as “home evaluation,” which many real estate agents provide for homeowners who are seriously considering selling. 

Are you planning to sell or are simply curious about how much your house might be worth? You can book a free home evaluation from one of our team members. 

What Is a Home Appraisal?

At first glance, a home appraisal appears to be very similar to a home evaluation (or CMA). An experienced professional comes out and evaluates all attributes of the house to determine its value based on location, size, and condition. 

What is the difference between an evaluation and an appraisal? An appraisal is performed by a certified appraiser, not a real estate agent. It’s also done for different reasons. Often, the bank will order an appraisal before finalizing the buyer’s mortgage to ensure they are not lending more than the home is worth. 

Appraised Value Vs Market Value

Both tools can result in a different number depending on the market, which is something all buyers and sellers need to keep in mind. The lender will not let the buyer borrow more than the appraised value, no matter how competitive the market is. 

If the bank says the house is worth $900,000, that’s what they will base their calculations on. If a bidding war drives up the selling price, the buyer will have to find a way to cover it or move on to a different listing.

Divorce is another scenario where a homeowner might need an appraisal rather than a home evaluation. A CMA by a Realtor® can be highly accurate and useful for deciding a compelling price point, but it is not a legal document recognized by the courts. 

When one spouse wants to buy the other out, we are looking for appraised value rather than market value. Unlike most CMAs, a home appraisal usually comes with a modest cost. 

Buying a home in Midtown Toronto is one of life’s most exciting moments! The posts below can help you realize the vision:

What Is an Assessment?

A home assessment is an entirely different concept altogether. It has nothing to do with fair market value or how much your house might sell for if you listed it today. Instead, it’s all about the government. 

An assessment is used by the municipality to determine how much you will owe in property taxes. It’s also by far the least accurate of any of these tools. Home assessments are notoriously out-of-date and often underestimate the real value of your property. 

In this case, being undervalued is an advantage. The less the city thinks your house is worth, the lower your final tax bill will be. However, you would never want to use the results from an assessment to determine the sale price or buyout value. 

Planning to sell a home in Midtown? The posts below can set you up for a successful experience:

What Do You Need and When?

Often, the question of getting an evaluation, appraisal, or assessment isn’t an either/or situation. At some point, you may need all three. 

  1. If you decide to sell your home, a CMA will help you find the right price point that generates the most excitement and interest from potential buyers. Ironically enough, a slightly lower number can often increase how much you earn from the sale of your home. 
  2. When the bank is deciding whether to approve a mortgage or you are splitting assets in a divorce, an appraisal is required. 
  3. An assessment is needed as long as you own property. The city will always want their share in taxes. 

Are you looking for expert advice to buy or sell in today’s market? Here’s How To Find The Best Midtown Real Estate Team.

When a Midtown Toronto Real Estate Agent Can Help

As Midtown experts, we can guide you and support you through any step in your transition. An official appraisal may be necessary for legal situations, but we are still happy to provide you with an evaluation to give you the best estimate possible, with no pressure to decide anything right away. 

When you’re ready, an agent will also be there to show you exactly what to do to prepare your home for sale so you make the absolute most of your transaction. This support is vital, not just for your success, but also for your peace of mind as you move forward to your next adventure. 

Our Midtown Toronto real estate agents are here for you, whether you’re buying, selling, or investing. Reach out to us at david@batorigroup.com, bobby@batorigroup.com or call (416) 485-7575 with any questions.