CMA vs. Appraisal: What Is The Difference?

by Conor J. Green

Real Estate CMAs, comparitive market analysis

They are usually completed by a real estate agent. CMAs help to establish a fair market value of a seller's property. In detail, a real estate CMA compares a seller's property to properties in a similar location or neighborhood, with similar features, and of a similar size. Sellers can then confidently choose a listing price for their home that is both competitive and realistic for their current market.

Appraisal

Appraisals are performed by a licensed appraiser, usually after a buyer is found. The purpose of an appraisal is for a bank or lender to establish the true value of a property prior to loaning money to a buyer. This ensures the bank, or lender, does not lend out more than the property is worth. For example, they would not approve a loan to a buyer for $750,000 for a property that is only worth $500,000.

The Two Main Differences: Who Does It & The Purpose Of It

A real estate CMA, or comparative market analysis, is completed by a real estate agent. Its purpose is to help sellers establish a listing price for their property that is both fair market value and competitive. Appraisals are completed by a licensed appraiser, and its purpose is to determine the true value of a property to ensure a bank or lender does not loan a buyer more money than the property is worth.

I hope this helps you understand how a real estate CMA or appraisal can benefit you as a buyer or seller. As always… if you have any questions please leave a comment, give me a call, or reach out via Facebook or Instagram!