Appraisal vs. Comparative Market Analysis: What’s the Difference?
Find out the key difference between an appraisal and a comparative market analysis.
Before deciding to jump into the market, most sellers want to know the value of their homes. Most agents use a comparative market analysis (CMA) to figure this out, but keep in mind that a CMA is not an appraisal. Appraisals are typically done by the lender when someone is looking to buy a home.
Agents and lenders both use recent sales, pending listings, and housing inventory to come up with a value. However, the lender is typically looking in the rearview mirror; agents are considering where the market is moving and how the trends are changing. Because of this, there can be a discrepancy between a home’s appraised value and purchase price.
The lender is typically looking in the rearview mirror; agents are considering where the market is moving and how the trends are changing.
With a CMA, we look at recent comparable and pending sales as well as the absorption rate, which influences how much a seller could get for their home.
If you’d like to learn the value of your home, or if you have any questions related to real estate in general, feel free to reach out to me. I look forward to hearing from you soon.
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