The honest answer: If you’re pricing your home for sale, get a free Letter of Opinion or CMA from a local agent. If you’re refinancing or dealing with a legal/estate matter, you need a paid appraisal. Most Ontario homeowners conflate these three — and end up paying for an appraisal when they didn’t need one, or relying on an online estimate when they should have asked for a CMA.
This piece is the honest breakdown of what each one is, when to use it, and what to expect.
The three documents — quick comparison
| Letter of Opinion | CMA | Appraisal | |
|---|---|---|---|
| Cost | Free | Free | $400-$600 |
| Prepared by | Real estate agent | Real estate agent | Licensed appraiser |
| Turnaround | 24-72 hours | 24-72 hours | 2-5 business days |
| Legal weight | Informal | Informal | Legal document |
| Used for | Pricing decisions, personal records, planning | Pricing your home for sale | Mortgage, refi, divorce, estate, tax appeal |
| Accuracy vs sold | ±3-5% | ±3-5% | ±3-5% |
Comparative Market Analysis (CMA)
A CMA is the workhorse document for selling. It’s a free, agent-prepared analysis that estimates your home’s market value by:
- Identifying 3-7 recent sold comparables (within 500m, last 90 days, similar property type)
- Adjusting each comp for differences vs. your home (bedrooms, baths, lot size, condition, parking, etc.)
- Examining current active listings (your competition) and recently expired listings (priced wrong)
- Reviewing days-on-market trends and list-to-sold ratios for your specific micro-market
- Producing a recommended list price range with reasoning
A good Ontario CMA lands within 3-5% of the final sold price. The reason for that accuracy: a local agent has been inside other homes in the area, knows the current buyer pool, and can adjust for nuance an algorithm or generic appraiser can’t see.
When to ask for a CMA: Whenever you’re thinking about selling. It costs nothing, takes 1-3 days, and gives you a defensible price band.
When NOT to use a CMA: For a mortgage application. For a divorce settlement. For an MPAC tax appeal. For an estate filing. None of those scenarios accept CMAs as documentation — they require an independent appraisal.
Letter of Opinion
A Letter of Opinion is essentially a more formal CMA: a written, signed document from a licensed real estate agent stating their professional opinion of value. It typically includes the same comp analysis as a CMA, but is presented as a standalone document rather than a slide deck or worksheet.
Letters of Opinion are useful when:
- You want a documented value for personal records (estate planning, family conversation, financial review)
- You’re not selling immediately but want to know where you stand
- You’re considering selling and want a defensible number to anchor decisions
- You’re refinancing and want a sense of value before the lender’s appraisal comes back
Letters of Opinion are NOT a replacement for appraisals in legal/financial matters, but they’re a useful piece of documentation between “online estimate” and “$500 appraisal.”
Alex prepares Letters of Opinion as a standard part of every consultation — even for homeowners 6-12 months away from selling. The document gives you something concrete to refer back to.
Professional Appraisal
An appraisal is a legal document prepared by a licensed appraiser (AACI, CRA, or DAR designation). It costs $400-$600 in Ontario and takes 2-5 business days.
Appraisers are independent of the transaction — they don’t represent the buyer, seller, or lender. Their methodology is rigorous: physical inspection of the property, detailed comp analysis, written report with supporting documentation.
You need an appraisal for:
- Mortgage approval (often required by lender on purchase or refinance)
- Mortgage refinance (lender will order it)
- HELOC application (some lenders require it)
- Divorce settlement (courts require independent valuation)
- Estate filing (probate / estate administration)
- MPAC tax assessment dispute (your evidence in appeal)
- High-value insurance (some specialty insurance products)
You do NOT need an appraisal for:
- Deciding whether to list your home
- Setting your list price
- Negotiating with buyers
- General “how much is my home worth” curiosity
If you’re paying $500 for an appraisal to figure out your home’s value before listing, you’ve spent $500 unnecessarily — a free CMA gives you the same accuracy for the purpose of pricing.
The misconception trap
The most common mistake we see: homeowners think “I want an objective number, so I’ll pay for an appraisal.”
The reality:
- An appraisal is more legally rigorous, not more accurate.
- For pricing a home for sale, a local agent’s CMA often outperforms an appraisal because the agent has current buyer-pool visibility the appraiser may not.
- Both methods land within ±3-5% of final sold price when prepared well.
- The appraisal’s value is its standing in financial/legal proceedings, not its accuracy.
If you don’t need standing in a financial/legal proceeding — don’t pay for an appraisal. Use a CMA.
How to decide which one you need
The decision tree:
- Are you applying for a mortgage, refinance, or HELOC? → Lender will order an appraisal. Don’t pay for your own.
- Are you in divorce proceedings or settling an estate? → You need an appraisal. Your lawyer can recommend one.
- Are you appealing your MPAC assessment? → You need an appraisal as your evidence.
- Are you pricing to sell — now or in the next 6-12 months? → Get a free CMA or Letter of Opinion from a local agent.
- Are you just curious or planning long-term? → Start with an online calculator (instant). Follow up with a free CMA if you want a real number.
This covers 95% of Ontario homeowner scenarios. The remaining 5% are usually high-net-worth or specialty cases where a real estate lawyer or accountant guides the documentation choice.
Practical advice for Ontario homeowners
If you’re somewhere on the spectrum between “curious about value” and “actively listing in the next 6 months”:
- Step 1: Run the free InstantCalculator for an immediate ballpark.
- Step 2: Check the home value hub for your neighbourhood’s recent sold data.
- Step 3: Get a free Letter of Opinion via a 20-minute call. Book here.
- Step 4: If you proceed to list, the CMA becomes your formal listing brief.
Total spend: $0. Total time: 1-2 hours over a couple of weeks. End result: a defensible market value within 3-5% of what your home will actually sell for.
Frequently asked questions
What’s the difference between a CMA and an appraisal?
A CMA (Comparative Market Analysis) is a free pricing recommendation from a real estate agent based on recent comparable sales. An appraisal is a paid legal document ($400-$600) from a licensed appraiser, used for lender financing, divorce proceedings, estate settlement, or MPAC tax disputes. CMAs are used for pricing decisions; appraisals are used for legal/financial transactions.
What’s a Letter of Opinion?
A Letter of Opinion is a written, signed document from a licensed real estate agent stating their professional opinion of a property’s market value, supported by 3-5 comparable sales and adjustments. It’s similar to a CMA but more formal — typically used when the homeowner needs documentation (estate planning, financial review, or simply to have it on paper). Like a CMA, it’s free, takes 24-48 hours to prepare, and represents the agent’s professional judgment, not an independent appraisal.
Can I use a CMA for my mortgage?
No. Lenders require an independent appraisal by a designated appraiser (AACI, CRA, or DAR). A CMA from your real estate agent has no standing for mortgage approval. CMAs are for pricing your home for sale — not for any lending decision.
How accurate is a Letter of Opinion compared to an appraisal?
Both typically land within 3-5% of final sold price when prepared by experienced practitioners. The appraisal carries more legal weight, but for the purpose of pricing your home for sale, a Letter of Opinion (or CMA) from a local agent is usually more useful because it reflects current buyer demand and recent micro-market trends an appraiser may not have direct visibility into.
Which one should I get?
If you’re pricing your home to sell — get a free Letter of Opinion or CMA from a local agent. If you’re refinancing, breaking a mortgage, or dealing with a divorce/estate situation — your lender or lawyer will order an appraisal. If you’re disputing your MPAC assessment — order an appraisal yourself. For most homeowners trying to figure out ‘what’s my home worth,’ the free CMA or Letter of Opinion is the right answer.
If you stayed in your current spot for another 12 months and the Ontario market moved against you — either way — how would that feel?
A free 15-minute Letter of Opinion call will tell you in 10 minutes what 6 weeks of Googling won’t: a real number for your home, the spread between selling now vs. waiting, and whether moving makes sense for your situation.
No agenda. If we get on the call and there’s nothing useful for you, I’ll say so.
 | Alex GoodmanSales Representative · RE/MAX Your Community Realty, Brokerage Alex Goodman is a Sales Representative with RE/MAX Your Community Realty, Brokerage, serving the Greater Toronto Area. He specializes in residential sales across Ontario — luxury, first-time buyer, and downsizing transactions — and maintains InstantCalculator.ca as a free public resource for Ontario homeowners researching their property value. |