cma vs appraisal



Real Estate Appraisal Overview

Real estate appraisals are intended to estimate the market value of a home. They’re commissioned for a variety of reasons. Lenders use them to make decisions about mortgage or refinancing approvals. Sellers use them to predict a final sale price. Buyers use them to help come up with a fair offer.

Real estate appraisers are licensed, certified professionals. They are ethically bound to offer an unbiased opinion using strict industry guidelines and standards set by the Uniform Standards of Professional Appraisal Practices (USPAP).

How Much Does a Real Estate Appraisal Cost?

Hiring a real estate appraiser usually costs about $300 to $400, however prices vary from one region to another. Appraisals for Federal Housing Administration loans are more expensive – as much as $500 – because the loans have more stringent requirements.

Real Estate Appraisal Pros

  • Unbiased – When you hire an appraiser, you know you’re getting an independent, unbiased opinion.
  • Regulated – Appraisers have to follow strict standards set by USPAP. They rely exclusively on specific, verifiable data points.
Average Real Estate Appraisl Prices

Real Estate Appraisal Cons

  • May not benefit you – Appraisers will not adjust their results to get you the best desired outcome. In fact, they could lose their licenses for doing that. An appraiser’s report may or may not benefit you.
  • More expensive – Appraisals come at a cost, while CMAs are completely free.

CMA Overview

A CMA, or comparative market analysis, is an estimate of a home’s value put together by a real estate agent. Listing agents put them together to come up with a listing price, while buyer’s agents put them together to come up with an offer price.

CMAs are put together using recent sales data and a real estate agent’s personal knowledge of the local market. Real estate agents also put a lot of weight on comparable homes in your neighborhood and their sale prices.

How Much Does a CMA Cost?

CMAs are completely free of charge. They’re provided by a real estate agent as part of the agent’s services.

CMA Pros

  • Designed to benefit you – CMAs are intended to advocate on your behalf and get you the best deal possible. For example, your listing agent will come up with a CMA that supports a strong listing price. A buyer’s agent will come up with a CMA for the same house that suggests a much lower sale price.
  • Free – CMAs provide a lot of helpful data at no cost to you.

CMA Cons

  • Subjective – CMAs are heavily influenced by personal opinion. A CMA is a great reference to have, but you should also get an appraisal for a more unbiased opinion.
  • Unregulated – There are no strict regulations or universal procedures for putting together CMAs, which makes them less reliable than appraisals.

Author: Ashley Smith

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Author S Krone

A lawyer never retires. So I would just say that I am not as active as I used to be. Now I simply dedicate myself to fishing, my hobby, and my grandchildren. For Business Finance News I write about legal aspects of mortgage policies, mostly regarding the rights of policyholders. I also have articles about personal injuries.

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