There are two ways you can determine the current value of your home – through a professional appraisal or a comparable market analysis (CMA). What’s the difference? A professional appraisal is performed by a licensed appraiser. While both are considered an opinion of value, an appraisal is a formal process that uses three approaches to determine the value of your home. The Cost Approach is derived from a calculation of the cost to replace the home, less depreciation and other factors, plus the land value. The Income Approach is pertinent to investors which involves estimating what an investor would pay based on the income produced by the property. The most common and accurate approach is the Sales Comparison Approach. This involves providing a comparison to other similar homes located nearby that have recently sold.

1. What Is The Difference Between An Appraisal
And A Comparable Market Analysis (CMA) ?
Authored by: Petra Norris

2. What Is The Difference Between An Appraisal And A Comparable Market Analysis (CMA) ?
There are two ways you can determine the current value of your home – through a
professional appraisal or a comparable market analysis (CMA). What’s the difference? A
professional appraisal is performed by a licensed appraiser. While both are considered an
opinion of value, an appraisal is a formal process that uses three approaches to
determine the value of your home. The Cost Approach is derived from a calculation of
the cost to replace the home, less depreciation and other factors, plus the land value.
The Income Approach is pertinent to investors which involves estimating what an
investor would pay based on the income produced by the property. The most common
and accurate approach is the Sales Comparison Approach. This involves providing a
comparison to other similar homes located nearby that have recently sold.

3. What Is The Difference Between An Appraisal And A Comparable Market Analysis (CMA) ?
In a Sales Approach, the professional appraiser will visit the home he or she is contracted
to appraise and will compare it to other homes currently for sale, homes under contract
and homes sold in recent months in the area with similar square footage, condition, age,
amenities, number of bedrooms, and more. The data gathered by the appraiser will be
compared to property tax records, along with recent market trends to determine if prices
have gone up or down. Information from the MLS is also used by appraisers.
If an appraisal comes in lower than the asking price of the subject home, the bank may
not grant the buyer the loan depending on the terms and condition of the sales contract
between the seller and the buyer.
Therefore, the seller will most likely need to reduce
the price so the buyer can purchase the property.

4. What Is The Difference Between An Appraisal And A Comparable Market Analysis (CMA) ?
A real estate agent not licensed as an appraiser can’t perform appraisals. Appraisals are
generally requested by the bank to protect its interests and to make sure they don’t loan
too much money for a home currently under contract to be sold.
A CMA is done by a professional real estate agent and is used to determine a home’s
current market value. The seller can then determine the best listing price for their home
where it will sell for the highest amount possible in the shortest amount of time. Hiring a
real estate agent to do a CMA is equally important to hiring an appraiser. You want to
hire an agent that is experienced providing you such an analysis. He or she must be
knowledgeable and have a true understanding of the real estate market, trends and
valuation concepts and is familiar with your community.

5. What Is The Difference Between An Appraisal And A Comparable Market Analysis (CMA) ?
Your real estate agent will get information from the MLS (multiple listing service) on
similar listed homes for sale, sold data, property tax roll data, historical trends and use
this data to generate a CMA. The CMA includes homes for sale in your immediate area as
well as recently sold properties that are similar to your home in square footing, number
of bedrooms, appearance, features, and price range. Such analysis may also include
comparable homes that are no longer on the market and homes currently under contract.
Establishing the fair market value of your home is very important to buyers and their
lenders. Once your buyer applies for a loan, the lender will order an appraisal on your
home for sale. If the price of your home is way above comparables, your home may not
sell and may stay on the market for a long time.

6. What Is The Difference Between An Appraisal And A Comparable Market Analysis (CMA) ?
If the price of your home for sale is based on your agent’s CMA, chances are good that it
will match the buyer’s appraisal. This means your buyer will most likely be approved for
the loan and you can quickly sell your home.
If you are thinking about selling your home in Lakeland, contact Petra Norris at 863-6196918 for an appointment or simply click here to fill out a form.

7. Petra Norris Realtor®
Lakeland FL Homes for Sale
CDV TransAtlantic, Inc.
PO Box 92050, Lakeland, FL, 33804-2050
Office Phone: (863) 619-6918
Cell Phone: (863) 712-4207