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A real estate agent can give you a market analysis for free. An appraisal will cost you money and usually isn't done unless the house is in escrow and there is a loan involved. And in that case the buyer normally pays for it. Why are you asking?
A real estate agent can give you a market analysis for free. An appraisal will cost you money and usually isn't done unless the house is in escrow and there is a loan involved. And in that case the buyer normally pays for it. Why are you asking?
I understand that. When I receive the analysis will it be a fairly accurate range of an appraisal?
CMA = Market Analysis = Opinion of Likely Sales Price
Appraisal = Opinion of Market Value by Licensed Appraiser.
NOTE: "Opinion." Twice.
A buyer cannot borrow money based on the CMA, but the Bank's appraisal will be the tool that banks use to determine how much to lend on a property.
IMO, a CMA from a Realtor can be more accurate than an appraisal from a licensed appraiser if your goal is to estimate what your house would sell for if it was on the market today.
Quote:
Originally Posted by MikeJaquish
CMA = Market Analysis = Opinion of Likely Sales Price
Appraisal = Opinion of Market Value by Licensed Appraiser.
NOTE: "Opinion." Twice.
A buyer cannot borrow money based on the CMA, but the Bank's appraisal will be the tool that banks use to determine how much to lend on a property.
The two have similarities, but are not the same.
Love that you emphasized the word "opinion" here. So many in the public seem to think the appraisal process is 100% "science" but there's definitely a large portion of "art" involved.
IMO, a CMA from a Realtor can be more accurate than an appraisal from a licensed appraiser if your goal is to estimate what your house would sell for if it was on the market today.
Love that you emphasized the word "opinion" here. So many in the public seem to think the appraisal process is 100% "science" but there's definitely a large portion of "art" involved.
Appraisals are sometimes wrong. A listing of mine had a second appraisal done because both buyer and seller agent were questioning it with the comps to back it up.
Whether to get an appraisal or a CMA depends on why you want it and what type of property you have.
If you want to sell, and have a home that is similar to others in the area, then a CMA from a good agent would probably be best. You should get a CMA from 2 or 3 agents that you have interviewed. You can review them and determine which one makes more sense. Don't just rely on the highest value. A good agent can thoroughly explain your market and the reasoning for the value. DO NOT choose an agent based only on the highest CMA value.
If you need a value for legal reasons, probate, tax, divorce, etc., an appraisal may be required.
If you have a truly unique home and/or you get a wide range of values from agents, then an appraisal would be a good idea. If you are selling, you will need to get an idea of what your buyer's appraisal will look like. With a CMA and an appraisal you can make better decisions on setting price and choosing which offer to accept. If an appraisal is lower than the price where you are getting offers, then make sure the buyer has extra cash and a willingness to go over appraised value. If you are listing for less than appraised value, then it makes for a great marketing tool.
Make sure you call a few agents and/or appraisers.
If you need an appraiser, call and ask about his experience in the area and with your particular type of property. Also, ask about the process of arriving at a value and how long it will take. You want to get an appraiser who will talk to you, explain the process, and will be willing to discuss the results after the appraisal has been completed. DO NOT choose based solely on price, a couple $100 either way is insignificant compared to the $1,000s of difference it could make.
The main difference between an appraisal and a CMA is the type of value being conveyed. A CMA typically is looking at "highest possible", while an appraisal is looking for "most probable". If you have specific needs, like sell within 30 days, then you would need to advise both agent and appraiser to adjust the type of value being estimated. Each circumstance is different and requires different logic and analysis.
Whether to get an appraisal or a CMA depends on why you want it and what type of property you have.
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Yes.
Quote:
Originally Posted by thebigW
The main difference between an appraisal and a CMA is the type of value being conveyed. A CMA typically is looking at "highest possible", while an appraisal is looking for "most probable". If you have specific needs, like sell within 30 days, then you would need to advise both agent and appraiser to adjust the type of value being estimated. Each circumstance is different and requires different logic and analysis.
Not exactly...
A CMA from a licensed real estate agent does not reflect an opinion of value.
Its purpose is to arrive at a likely sales price.
Valuation is solely the realm of licensed appraisers.
If I were putting a house on the market, I'd just get a CMA. Actual sales price will be different in any case and you don't know what you'll get until you try. CMAs are fairly easy to arrive at now due to all the RE sites online.
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