Comparative Market Analysis (CMA) vs. Appraisals


A CMA is a quick estimate of your home’s value completed by your Realtor® to establish a listing price.  Your agent will create a CMA by utilizing recent sales data from comparable homes in your area and their knowledge of your local market.  The majority of this data comes from the local Multiple Listing Service (MLS).

A comparable home is one that is of the same type, similar square footage, age, lot size, basement, parking, and condition.  A CMA should be used as a reference point from which you decide your listing price.

When your agent pulls comparables, factors that will be considered are:

 Homes that have recently sold
 Homes that are currently listed
 Homes that have expired
Your Realtor will include a window of high end and low end prices in this listing estimate.  Where a seller prices their home in that window determines how quickly the home will sell.  And, how quickly a seller needs to sell is determined by the seller based upon their objectives and needs.

A real estate appraisal is done by a licensed real estate appraiser and is used by lenders for mortgage and refinancing purposes.  An appraiser’s only job is to give opinions of value regarding real estate.  An appraiser will use similar methods in coming to a property value as your broker, including data from the MLS.

Simply put, a CMA is a seller agent’s reliable opinion of value.  Or, in the case of a buyer’s agent, it gauges whether or not a buyer’s offer is reasonable.  An appraisal report is a licensed appraiser’s opinion of fair market value and whether or not the property is worth the price it is being sold for.

If you’re mortgaging a home, your lender will always get an appraisal.  If you’re purchasing a home with cash, it’s still very wise to pay an appraiser for their professional, unbiased opinion. 

 What About Those Other Home Value Sites?

Homeowners often reference values they've found online at from Zillow, Trulia, and Yahoo to their listing agent.  They're often shocked at their agent's suggested listing window believing what they've found online holds more resale weight than a Realtor's or an appraiser's professional experience and knowledge.  Realtors are continually frustrated with such aggregate sites because they do not paint an accurate picture of value.  In fact, many times their data is not correct or up-to-date.

These sites are owned by media companies that generate revenue by selling advertising.  Your best resource for estimating real estate value is a CMA from a Realtor free of charge or an appraisal report from a licensed appraiser.

P.O. Box 26, Cottleville, MO  63338
Office/Cell:  636-346-6344

All information contained herein is not guaranteed and is subject to verification.

Entering into a real estate transaction has legal consequences.
Realtors® are not attorneys.  If you do not understand the consequences associated with

a real estate transaction, you should consult your attorney.