Appraisal VS. Comparative Market Analysis 

 December 11, 2019

By  Lora Keller

Need An Appraisal For A Property In Southwest Florida? Call (941) 743-3700

Appraisals VS CMAWhen you first start the home selling process, it’s easy to quickly become overwhelmed with all the steps, documents, and legal hoops that you must jump through. What’s even worse, most homeowners looking to sell their property need a real estate professional or attorney to even understand half of the documents required to sell your home.

Selling your home is stressful, however, we can help answer some of the questions you may have. One commonly misunderstood part of the home selling process is the difference between an appraisal and a comparative market analysis.

Both are very important and are similar in ways but are different in others. First, before you can understand the difference you must understand what they are.

What Is an Appraisal?

The definition of an appraisal is the act of assessing something or someone. That is basically what an appraisal is in real estate as well. It is the professional and objective opinion of a certified appraiser determining what the current value of your home is.

An appraisal is important for a buyer when purchasing a home. The buyers’ lender will want to know what the current value of the home is in order to determine the amount the buyer will need to borrow. The lender wants to make sure they are not giving the buyer more than what the home is actually worth.

The home is basically collateral that the lender can use if the home buyer doesn’t pay back the loan. If the home was to be foreclosed on the lender can use the home to regain the money it originally loaned. That is why an appraisal is mostly for the buyer. However, the seller can have an appraisal done in order to make sure that they are pricing the home correctly.

For example, let’s say the home seller lives in Pinellas and puts their house on the market for 200,000. A buyer comes along and decides to purchase the home. During the closing process, the buyer will be required to have their own appraisal completed by a Pinellas County property appraiser.

If the appraisal comes back that the home is actually worth much more or far less than what the buyer originally agreed upon, it can halt the closing process and cause further negotiation issues between the buyer and the seller.

Competitive Market Analysis Vs Certified AppraisalsWhat Is a Comparative Market Analysis?

A comparative market analysis (CMA) is very similar to an appraisal in the fact that it’s an estimate of what your home’s current value is. A CMA is performed by your real estate agent, not a certified appraiser. This means it doesn’t act the same way that an appraisal does and can not be used as an official and legally accepted value of your home. It’s more like a rough estimate and can be unreliable.

The CMA process is only slightly similar to the appraisal process because the agent performing the CMA will take a look at other homes that have recently sold in the area. They will look for ones that are similar in design, size, and overall quality.

These homes are also known as comparable or comps for short. This is actually a part of the appraisal process as well. One key difference between a CMA and an appraisal is the person conducting each.

When an appraisal is done the process is completed by a certified appraiser. The appraiser is required to give an unbiased opinion of the value of the home. This is the reason why the lender has a separate party come in and evaluate the home, in order to have a professional, supported and documented indication of value for the collateral.

When having a comparative market analysis done the real estate agent is the one who completes it (usually for free). This is still a way to get an idea of your home’s value. Real estate agents have access to multiple listing services in which they can roughly access the value of your home by using comps.

The only problem is that a real estate agent is invested in helping you sell your home. Agents make the majority of their money by selling homes which means that their opinions aren’t always so objective. This is why having an appraisal done by a certified appraiser is so important in the home buying and selling process.

To learn more about appraisals or to schedule an appointment contact RE Appraisal Associates of SWFL. We can help you to better understand the process and help you with a quick and accurate appraisal. So give us a call today at 941-743-3700.

Lora Keller


Lora Keller 

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