A lender's appraisal, an agent's market analysis and an online estimate can produce different figures for the same home. Their purpose, information and method explain why the numbers may disagree.
Which valuation serves which purpose
An appraisal provides a professional opinion of value for its stated purpose, while an agent's market analysis supports a pricing decision. An online estimate is a model output whose usefulness depends on the property information available to it.
The appraisal
Ordered by the lender, not by you, even though you usually pay for it. Performed by a licensed or certified appraiser who is required to work to professional standards and who is meant to be independent of everyone with an interest in the transaction, including your agent. Its audience is the lender's risk department.
Its question is whether the property supports the loan.
That independence is the point of it. An appraiser you could influence would be worth nothing to the bank, which is exactly why your agent cannot lean on one.
The market analysis
Prepared by an agent, for the seller, before the house goes on the market. Its question is not what the house is worth in the abstract. It is what will happen if you ask a given price on a given date, and what the likely outcomes look like at three or four different numbers.
A market analysis is a strategy document. It is not an appraisal, it does not carry an appraiser's obligations, and no agent should present one as though it does. I build every Comparative Market Analysis myself, line by line, which mostly means I can tell you which comparable sales I threw out and why.
That part matters more than the number at the bottom.
The online estimate
An online model uses the records and listing information available to it. Check whether those records reflect the lower level, room descriptions, roof replacement and surroundings of the particular property.
An online estimate can provide a starting range, particularly where the model has closely comparable homes. Review the available information carefully for an older home, acreage, a custom build or a property altered over thirty years.
Which number to care about, and when
- Deciding whether to sell at all: the market analysis, plus an honest conversation about condition
- Setting a list price: the market analysis
- Getting a loan approved: the appraisal, and nothing else
- Curiosity on a Sunday evening: the online estimate is fine for that, and should stay there
- Divorce, estate, or anything a court or the IRS will read: an appraisal, and usually a specific kind, which is a question for the attorney or the CPA
When comparing price opinions, ask which completed sales support each one and what differences were accounted for. A proposed asking price should have an explanation that can be checked against the house and the evidence.
Which valuation a court, an executor or a tax filing requires is an attorney and CPA question, and the wrong kind of report is an expensive mistake to discover late. What an appraisal gap means for your financing, and who covers it, belongs to your lender and to the language of your contract. I will tell you who to ask and what to ask them.
If you want the strategy version for a specific house, that is what the home evaluation is for. If the question is really whether the house still fits, the Lifestyle Calibration page starts there instead.
This note describes categories of valuation in general terms. It is not an appraisal, not legal or tax advice, and not an opinion of value for any particular property.