What is the difference between an Appraisal and a Comparative Market Analysis (CMA)?
The CMA relies on vague market trends. The appraisal relies on specific, verifiable comparable sales. In addition, the appraisal looks at other factors like condition, location and construction costs. A CMA delivers a ”ball park figure.” An appraisal delivers a defensible and carefully documented opinion of value. But the biggest difference is the person creating the report. A CMA is created by a real estate agent who may or may not have a true grasp of the market or valuation concepts. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Further, the appraiser is an independent voice, with no vested interest in the value of a home, unlike the real estate agent, whose income is tied to the value of the home.
A Comparative Market Analysis is created by a real estate agent. The Appraisal is created by a licensed, certified professional with extensive education and experience and contains specific, verifiable comparable sales. The appraiser is an independent, unbiased party with no vested interest in the value of the home. The real estate agent may or not be trained in valuation techniques and his/her income is tied to the value of the home. Only an appraisal can be used for lending purposes. The rules for developing an appraisal are dictated by State Law and the Uniform Standards of Professional Appraisal Practice (USPAP).
Simply put, the difference is night and day. The CMA relies on vague market trends. The appraisal relies on specific, verifiable comparable sales. In addition, the appraisal looks at other factors like condition, location and construction costs. A CMA delivers a ”ball park figure.” An appraisal delivers a defensible and carefully documented opinion of value. But the biggest difference is the person creating the report. A CMA is created by a real estate agent who may or may not have a true grasp of the market or valuation concepts. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Further, the appraiser is an independent voice, with no vested interest in the value of a home, unlike the real estate agent, whose income is tied to the value of the home.
Simply put, the difference is night and day. The CMA relies on vague market trends. The appraisal relies on specific, verifiable comparable sales. In addition, the appraisal looks at other factors like condition, location and construction costs. A CMA delivers a ”ball park figure.” An appraisal delivers a defensible and carefully documented opinion of value. But the biggest difference is the person creating the report. A CMA is created by a real estate agent who may or may not have a true grasp of the market or valuation concepts. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Further, the appraiser is an independent voice, with no vested interest in the value of a home, unlike the real estate agent, who hopes to get the listing and whose commission is tied to the value of the home.
Simply put, the difference is night and day. The CMA relies on vague market trends. The appraisal relies on specific, verifiable comparable sales. In addition, the appraisal looks at other factors like condition, location and construction costs. A CMA delivers a ”ball park figure.” An appraisal delivers a defensible and carefully documented opinion of value. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Further, the appraiser is an independent voice, with no vested interest in the value of a home. • What does the appraisal report contain? Back to top Each report must reflect a credible estimate of value and must identify the following: • The client and other intended users. • The intended use of the report. • The purpose of the assignment. • The type of value reported and the definition of the value reported. • The effective date of the appraiser’s opinions and conclusions. • Relevant property characteristics, includin
