Home Valuation vs. Appraisal vs. MPAC Assessment: What's the Difference?

Homeowners routinely get three different values for the same property in the same month and assume someone made a mistake. Usually nobody did. Each number answers a different question, and they are not supposed to match.

Market valuation (also called a CMA)

A comparative market analysis is an opinion of what buyers would likely pay today, prepared from recent comparable sales. It is forward-looking and market-driven: it accounts for buyer demand this month, competing inventory, and how your home would present. It is free, it is not a legal document, and it is the right tool for pricing, planning and equity decisions.

Appraisal

An appraisal is a formal written report prepared by a licensed appraiser, almost always ordered by a lender to protect the lender. Appraisers are deliberately conservative and use a defined methodology. If a lender appraises below your purchase price, your down payment has to cover the gap — which is exactly why appraisal risk matters when you buy in a hot market.

MPAC assessment

MPAC assessments exist to allocate property tax, not to estimate resale value. Ontario's assessed values have been frozen at a January 1, 2016 valuation date for years, so in most of the GTA an assessment is dramatically below market. A low assessment is not bad news, and a high one is not a selling point.

Which number do you need?

• Thinking about selling, or curious about equity: market valuation.
• Applying for a mortgage, refinance or HELOC: the lender will order an appraisal.
• Disputing property taxes: the MPAC assessment is the relevant figure.
• Estate, separation or legal matters: usually a formal appraisal, sometimes with a retrospective valuation date.

The practical takeaway: never price a home from an assessment, and never assume an appraisal will confirm the price you paid on a competitive offer night.