You need to know your home’s value. Three documents claim to tell you: a letter of opinion, a comparative market analysis, and an appraisal. Only one is legally binding. Here’s which one you actually need.
What Is a Letter of Opinion in Ontario?
A letter of opinion—also called an indicative market value letter or IMV—is a written estimate of your home’s value prepared by a licensed real estate agent. It’s based on comparable sales, current market conditions, and property characteristics.
The critical word: indicative. It’s not a formal valuation. It’s a professional opinion, typically one to three pages, that says “based on what I see, your home is worth approximately $X.”
In Ontario, letters of opinion are commonly prepared by Ontario Real Estate Association members and are especially common when:
- A homeowner wants a rough estimate before listing
- An executor needs guidance for estate planning
- A divorcing couple needs a starting point for negotiation
- A homeowner is curious about their property’s current market position
Most realtors in Ontario provide letters of opinion at no cost—it’s a standard marketing tool. The letter typically includes the agent’s MLS number, brokerage details, and a disclaimer that it is not an official appraisal.
Letter of Opinion vs. Comparative Market Analysis (CMA)
These terms are often used interchangeably, but they’re not identical.
What’s a CMA?
A comparative market analysis (CMA) is a more structured document that a realtor prepares when you’re selling. It compares your home to 3–6 recently sold properties (comps) in your neighbourhood, analyzes price per square foot, and suggests a listing price range.
A CMA is longer and more detailed than a letter of opinion. It includes:
- Sold comps with sale dates and prices
- Active listings for comparison
- Expired listings (homes that didn’t sell)
- Days-on-market analysis
- Recommended listing price range
Key Differences
| Aspect | Letter of Opinion | CMA |
|---|---|---|
| Purpose | General curiosity, estate, divorce | Preparing to sell |
| Detail Level | 1–3 pages, summary opinion | 3–5 pages, structured analysis |
| Comparables | Varies; may be general | Specific sold comps with dates |
| Cost | Free (from most Ontario realtors) | Free (from listing agent) |
| Legal Weight | None; opinion only | None; opinion only |
Both are professional opinions prepared by licensed agents. Neither is a legal document. Both can be useful for planning, but neither satisfies lender or court requirements.
When Each Document Is Legally Appropriate
Letter of Opinion
Estate Planning: An executor or beneficiary may request a letter of opinion to estimate the estate’s value for probate purposes. However, the Ontario Superior Court may require a formal appraisal if the estate value is contested or substantial.
Divorce/Family Law: Both spouses may agree to use a letter of opinion as a starting point for dividing marital assets. However, if parties disagree, the court may order a certified appraisal under Ontario family law rules.
Personal Curiosity: If you simply want to know what your home might be worth before a future sale, a letter of opinion is appropriate and free.
Refinance Inquiry: If you’re thinking about refinancing, a letter of opinion is a useful starting point. However, your lender will require a formal appraisal to approve the loan. See our refinance guide for details.
CMA
Listing Your Home: A CMA is the standard document your real estate agent prepares when you’re about to sell. It justifies the asking price and provides comparable sales data to your agent’s buyers.
Price Negotiation: Buyers’ agents use CMAs to argue for lower offers; sellers’ agents use them to defend asking prices.
Formal Appraisal (AACI)
A formal appraisal prepared by an Appraisal Institute of Canada (AACI)–designated appraiser is legally required for:
- Mortgage refinance: Lenders mandate a formal appraisal to establish the collateral value. CMHC and other lenders set appraisal standards.
- Contested estate or divorce: Courts typically require an appraisal if parties dispute value or the amount is substantial.
- Legal disputes: Property tax appeals, insurance claims, and civil litigation often require a certified appraisal.
- Commercial transactions: Lenders and buyers in commercial real estate typically demand formal appraisals.
An AACI appraisal is a 15–30 page report prepared by a certified professional who physically inspects the property, researches comparable sales, and applies standardized valuation methods. It is admissible in court and acceptable to lenders.
Cost Comparison: Letter of Opinion, CMA, and Appraisal
Letter of Opinion
Cost: Free
Most licensed realtors in Ontario provide a letter of opinion at no charge. It’s considered a service to establish a relationship with potential sellers or to assist friends and family.
If you use a realtor’s online calculator, like InstantCalculator.ca, you can get an automated estimate immediately, also free. Automated estimates are based on public data and algorithmic analysis, not human judgment, so they’re less personalized but available instantly.
Comparative Market Analysis
Cost: Free
When you list your home with a real estate agent, the CMA is provided as part of the listing service. You don’t pay separately. It’s included in the realtor’s commission structure.
Formal Appraisal (AACI)
Cost: $500–$700 (residential)
A certified appraisal in Ontario typically costs $500–$700 for a single-family home, depending on property complexity, location, and the appraiser’s experience. Commercial properties cost more.
When you refinance a mortgage, your lender orders the appraisal and bills you for it (usually added to closing costs). You don’t choose the appraiser; the lender does.
If you order an appraisal independently (for estate, divorce, or legal reasons), you hire the appraiser directly and pay upfront.
Quick Cost Summary
- Letter of Opinion: Free from realtors; instant from online tools
- CMA: Free from listing agent
- AACI Appraisal: $500–$700; required by lenders and courts
Frequently Asked Questions
Can I use a letter of opinion to refinance my mortgage?
No. Lenders require a formal appraisal from a certified appraiser. A letter of opinion has no legal standing with financial institutions. Your lender will order and pay for the appraisal as part of the refinance process.
Is a letter of opinion admissible in family court?
Not as a primary valuation document. Ontario family courts may consider a letter of opinion as context, but if property value is disputed, the court will order a formal appraisal by a certified appraiser. Spend the $500–$700 upfront to avoid litigation costs later.
Can I get a letter of opinion online?
Yes. Automated home value tools (including InstantCalculator.ca) provide instant estimates based on public data. These are algorithm-driven, not agent-prepared, but they’re free and fast. For a more personalized assessment, contact a local realtor.
What’s the difference between “indicative market value” and “appraised value”?
Indicative market value (a letter of opinion) is a professional guess based on recent sales and market conditions. Appraised value is a certified, methodology-based valuation prepared by a licensed appraiser following AACI standards. Appraisals are legally defensible; opinions are not.
Who can prepare a letter of opinion in Ontario?
Any licensed real estate agent in Ontario (member of OREA) can prepare a letter of opinion. There is no formal certification or standardization—it’s a professional courtesy. For a binding valuation, hire a certified appraiser.
How often should I update a letter of opinion?
A letter of opinion is valid for estate and divorce purposes for approximately 3–6 months, depending on market movement. If the market shifts significantly or your property changes, get a fresh one. If you’re refinancing, your lender will order a new appraisal regardless of prior estimates.
Want a precise number for your specific address? Get a free instant estimate at InstantCalculator.ca → Run my home value.
 | 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. |