CMA vs. Appraisal - What's the Difference?

CMA vs. Appraisal - What's the Difference?

Comparative Market Analysis (CMA) and appraisals are both professional estimates of a home’s value, but they fulfill very different functions in the house selling process. A licensed real estate agent performs a CMA to recommend the best price at which a homeowner should list their property. To prepare a CMA, the agent takes into account both active and closed sales and sometimes even pending and expired listings, too for a holistic picture of the local market. Usually, real estate agents perform CMAs free of charge. 
 
On the other hand, an appraisal is typically conducted by a licensed appraiser to help a bank determine how much to lend for a mortgage. It's concerned mostly with the age, size, market area and condition of the property. During their estimation process, appraisers will consider active and pending listings, however, their final conclusion will be based on the prices for sold homes in the area. Banks won’t lend a mortgage for more than the appraised amount. This can cause a sale to fall through unless parties adjust sales price accordingly or the buyer agrees to cover the difference out of pocket. Licensed and/or certified appraisers carry out appraisals, and they’re not free. Expect to pay $400-$600 for this service.

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