Comparative Market Analysis (CMA) vs. Appraisal


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What is a comparative market analysis (CMA) and how is it different from a real estate appraisal report?

The difference between a CMA (comparative market analysis) and a real estate appraisal report is that one is done by your real estate professional and one is done by a licensed real estate appraiser.

A CMA is an estimate of your home’s value done by your real estate professional to establish a price for listing your home or offer price. This is done when you decide that you want to sell or buy a home or property.  This service is  offered free of charge and without obligation.  A CMA should only be used as a reference for deciding at what price you should list or buy a home .

Your real estate professional will create a CMA by utilizing recent sales data and using knowledge of the local market.  She/He will compare your home with homes that are most like yours in your area.  A comparable home/property is one that is of the same type (single-family, multi-family, commercial, etc.), is in similar condition inside and out, and has the same or close to the same number of bedrooms, baths, square feet etc.

Some factors that will be considered are:

  • Comparable properties that have recently sold (3-6 Months),
  • Properties that are currently listed in the Multiple Listing Service (MLS),
  • How long similar properties have been on the market,
  • Property listings that have expired or have not sold,
  • Location (such as corner lot, school district, street traffic, proximity to hi-ways etc.)

Other methods may be used by your broker depending on the type of subject property and/or the needs of the client.

A real estate appraisal is done by a licensed real estate appraiser and is most often used by lenders when issuing mortgages for refinancing or buying/selling a home. Appraisals, although, can also used for any other reason a determination of value is needed or wanted.

A real estate appraiser’s only job is to give an unbiased opinion of value of the property.  An appraiser will use similar methods in coming to a property value as your real estate agent, but they must also follow strict licensing and industry guidelines as well as follow the Uniform Standards of Professional Appraisal Practices (USAP).  You can find more about USAP here.

Simply put, a CMA is your real estate agent’s attempt to establish an opinion of value in order to sell your property for the most money possible, or in the case of a  buyer’s agent, to determine if your offer is in not above their opinion of value.  An appraisal report is a licensed appraiser’s opinion of fair market value and whether or not the property is worth the price you are trying to buy or sell it for.

If you are buying a home, your lender will always have an appraisal done and you have a right to a copyt.  If you plan on not using financing to obtain a property, a CMA is a good reference but it is highly recommended an appraisal report is still done.

We offer FREE CMAs, feel free to request one for your home by entering the information below:

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