Market assessment, appraisal, and assessed value: what each one is for

People are often surprised that one home can have several “values” at once. Each is produced by a different person, for a different purpose, using a different date and method. None of them is a guaranteed selling price. Knowing which one you are looking at helps you ask the right questions.

A market assessment is prepared by a real estate professional to help owners understand how the home might be positioned if it were offered for sale now. It typically looks at:

• Recent sales of comparable homes nearby, and how they differ from yours
• Homes currently listed that a buyer would compare against yours
• The home’s condition, layout, and features
• Current market activity, such as how quickly similar homes are selling

The result is usually a potential range with an explanation of the reasoning, not a single certain figure. It is a planning tool for a possible sale. It is not a formal appraisal and may not be accepted where an independent valuation is required.

An appraisal is a formal opinion of value prepared by a qualified appraiser who is independent of any sale. Appraisals are often used when a lender needs a valuation, or when an independent figure is wanted for other purposes, such as discussions between owners.

Whether an appraisal is needed, what date it should be prepared as of, and who should order it are questions for your lawyer and, where financing is involved, your lender.

BC Assessment is the provincial organization that values properties across British Columbia each year for property tax purposes. Your assessment notice shows that value.

The assessed value is calculated across many properties at once, as of a set valuation date, and is used to share out property taxes. It is not a prediction of what a buyer will pay for your particular home today, and a sale price can be higher or lower.

You can look up a property’s assessed value and read how assessments work on BC Assessment’s website (opens in a new tab).

• Thinking about whether and how to sell: a market assessment can explain likely positioning, preparation, and costs.
• Needing a figure for a legal or financing purpose: ask your lawyer or lender whether an independent appraisal is required.
• Checking property taxes: the BC assessed value is the relevant number.

Your lawyer, and your lender where relevant, are the right people to decide which valuation your situation requires.