Real Estate Report: CMA vs. Appraisal
To clear up any confusion, there is a definite difference between a Comparative Market Analysis (CMA) and an appraisal. Basically, they are two different levels of reports in determining value for a piece of property.
The first report, a CMA, is usually completed by a licensed Realtor®, and is less comprehensive than a full-fledged appraisal. This report is used by Realtors® to provide buyers and sellers with “comps”, or in other words, similar properties that have sold, and/or are current active listings in the MLS. The report itself has a disclaimer that reads, “This analysis is not an appraisal. It is intended only for the purpose of assisting buyers or sellers or prospective buyers or sellers in deciding the listing, offering, or sale price of the real property.”
By comparison, an appraisal is a valuation of property by the estimate of an authorized and licensed person that specializes in appraising property. In order to be a valid appraisal, the authorized person will have a designation from a regulatory body governing the jurisdiction the appraiser operates within. Some appraisers are licensed Realtors®, but most Realtors® are not licensed appraisers. The appraisal report is a more comprehensive analysis of the value of a property that includes adjustments for various differences between properties, whereas a CMA usually does not offer this level of detail.
Sometimes people will reference their home’s value, when what they are really referring to is their tax assessment value that is found in public records. Property values determine how much a homeowner must pay in property taxes each year, and county officials perform these “assessments” every 3 years.
CMA’s can be provided by local Realtors®, free of charge, and provided pretty quickly. But when a full fledged appraisal report is needed, it must be ordered through your lending institution if applying for a loan, and the turnaround time can be anywhere from 7-14 days, with a cost range of usually $400-600 depending on the type of property (commercial property appraisals run in the thousands.) There are also new guidelines in place over recent years that bar mortgage brokers from ordering appraisals themselves. Most lenders now use outside firms known as appraisal management companies to order appraisals, and the mortgage broker is not able to talk to the appraiser about the value of the property they are evaluating.
Lauren Bunting is a licensed REALTOR®with Bunting Realty, Inc. in Berlin, MD.
Lauren Bunting is a Broker with Keller Williams Realty of Delmarva in Ocean City, Maryland.
