The Difference Between a Comparative Market Analysis and an Appraisal
- A Comparative Market Analysis (CMA) is conducted by a real estate agent using local market knowledge and data from the multiple listing service (MLS), which includes information on sold homes and market trends. The analysis helps price the home accurately, ensuring competitiveness in the current market. Note that if you’re considering selling your home For Sale By Owner (FSBO), you cannot conduct a CMA independently as MLS access is exclusive to real estate agents.
- In contrast, an appraisal, which is usually ordered by the bank when a buyer applies for a loan, is conducted by a licensed appraiser. Independent appraisal can be ordered for situations like the death of the property owner, or change of title to establish a fair market value. Unlike a CMA, appraisers have no vested interest in the sale and aim to determine your home’s fair market value, preventing the bank from lending more money than necessary. Both methods involve comparing your home to others in the area, but a CMA is agent-led, while an appraisal is performed by an independent appraiser on behalf of the bank.