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
broker 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 broker to
establish a listing or
offer price when you decide that you want to sell or buy a home or
property. This
service is always 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 your
home for.
Your
broker will create a CMA by utilizing recent sales data
and using their knowledge of the local market.
She/He will compare your home with homes that are
most like yours in
your neighborhood, or similar neighborhoods nearby.
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
units and
land/living area size.
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 subject property.
An appraiser will use similar methods in coming to a
property value as your broker 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 broker'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
copy, but you usually have to ask for it.
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.
This information is
brought to you by One World Real Estate | Find more @ OneWorldrRE.com
Copyright 2008
One
World Real Estate | OneWorldRE.com
