What's the difference beween a market analysis and an appraisal

From Realty Times,

What's the Difference Between a CMA and an Appraisal? By Blanche Evans   

 

How do you find out the value of your home? There are two ways - a comparative market analysis, or CMA, and a professional appraisal.

The CMA is used to determine current market value so that you can choose the listing price where your home will sell quickly and for the highest amount possible. 

 

Your real estate professional gets the information for the CMA from the multiple listing service, or MLS, where brokers and their agents pool information on listed properties for sale. The MLS also contains sold data, historical trends and property tax roll data.

The CMA includes recently sold homes and homes for sale in your immediate neighborhood that are most similar to your home in appearance, features, and general price range. Establishing a home's fair market value is equally important to buyers and their lenders. When your buyer applies for a loan, the bank will order an appraisal.

Where the bank appraisal differs from a CMA is that it is performed by a licensed appraiser - not a real estate agent. Even though the appraiser is hired by the bank, the appraiser has no vested interest in the transaction.

The appraisal is designed to protect the bank, so that it doesn't loan too much money for a single property. The appraiser visits your home and compares it to other similar homes using square footage, finishes, age, condition, location, and more.

The data is compared to property tax records and recent solds as well as sales trends to determine the arc of prices up or down. Appraisers also use information from the local MLS.

If an appraisal comes in lower than the asking price of the home, the bank will not make the loan, and the seller will likely reduce the price for the buyer.

One thing is certain, no home will sell for more than it's worth in any market. If you price your home based on the information suggested by the CMA, chances are good that the buyer's appraisal will support the sales price.

If you price your home above comparables, it's a sure way to insure your home won't sell.

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. We can help. Located in Fairfield, NJ, we are the title insurance agent that does it all for you.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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