Appraisal vs Automated Valuation Model (AVM)
An appraisal is a documented opinion of value by a licensed professional based on inspection and comparable analysis. An AVM is a statistical estimate from sale records and property attributes — fast, cheap, and inappropriate for most legal, lender, and tax uses.
What's actually different
| Dimension | Appraisal | AVM |
|---|---|---|
| Who produces it | Designated appraiser (AIC: AACI / CRA, or provincial equivalent) | Software model owned by a data provider or lender |
| Property inspected? | Yes (or explicit drive-by/desktop scope) | No — relies on assessor and MLS data only |
| Defensible at CRA / court | Yes — narrative reports built for reliance | No — typically excluded by CRA, courts, and OSFI-regulated lenders |
| Typical cost | $400 – $1,500 CAD | $0 – $40 CAD |
| Turnaround | 2 – 14 business days | Instant |
| Reflects recent renovations | Yes | Only if reflected in assessor data |
| Used by federally regulated lenders | Yes (B-20 compliant) | Increasingly, but typically with a confidence-score floor |
- •Divorce / separation
- •Estate or probate
- •CRA capital-gains or change-in-use filings
- •Property tax appeal
- •Private-lender or non-bank refinance
- •Litigation or expert-witness use
- •Casual curiosity about value
- •Lender's pre-screen before ordering a full appraisal
- •Portfolio-monitoring at scale (lenders, investors)
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Keep learning
A CMA is a pricing tool prepared by a real estate agent to help a seller set a list price. It is not an independent valuation and is not accepted for lender, legal, or CRA reliance.
These are complementary — not substitutes. An appraisal estimates market value; a home inspection evaluates the physical condition of the building's systems.
A property tax assessment is a mass-appraisal value produced by a provincial assessment authority for tax calculation — it lags the market, often uses an out-of-date base date, and cannot be used as evidence of current market value.
A BPO is a price opinion provided by a real estate broker, typically for lenders managing distressed or REO assets. It is faster and cheaper than an appraisal but is not produced by a designated appraiser and is excluded from many regulated uses.
Appraisals come in three inspection scopes — full (interior + exterior), drive-by (exterior only), and desktop (no inspection, all data from records and photos). The scope must match the intended use.