What's the Difference Between a CMA and an Appraisal?
Hello and welcome! My name is Ruochu and I’m a real estate agent in Maryland, specifically in the Columbia/Ellicott City area. I really hope that I will be able to help you guys out there who are interested in buying or selling a house.
The topic I want to cover is something very basic, but something that can be very confusing. This topic is the difference between a CMA (comparative market analysis) and an appraisal.
A CMA is an analysis a realtor does for a seller to determine what their property is worth so they can select the best price to list it for. This is done by gathering data on similar properties in the surrounding area that have about the same square footage and the same features. A real estate agent will typically then do some adjusting of the values for differences between the properties, and end up with an average ballpark price or price range that they will then recommend to the seller.
Appraisals can actually be very similar to CMAs in terms of what is being analyzed, but there are a number of key differences between the two. First of all, appraisals are conducted by licensed appraisers, not real estate agents. They are required by lenders to determine the market value of the home and to essentially make sure they’re not lending out too much money for a property that’s not worth it. This is something done on the buyer's side that has to do with their financing, while a CMA is usually done on the seller’s side to determine how they will price their home.
That’s it for this short article! Thank you so much for reading and if you have any questions or comments, feel free to comment below. I hope to see you again soon!