An appraisal and a comparative market analysis (CMA) serve similar purposes in real estate but are conducted by different parties and have different levels of formality:
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Appraisal:
- Conducted by a licensed appraiser.
- An in-depth, formal evaluation of a property's value.
- Considers various factors including property condition, size, location, recent sales data, and market trends.
- Often required by lenders before approving a mortgage loan.
- Typically costs several hundred dollars.
- Results in a comprehensive appraisal report.
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Comparative Market Analysis (CMA):
- Conducted by a real estate agent.
- A less formal analysis that estimates a property's value based on recent sales data of similar properties in the area (comparables or "comps").
- Helps sellers determine an appropriate listing price and buyers make informed offers.
- Usually provided to clients as a complimentary service.
- Results in a comparative market analysis report, which may not be as detailed as an appraisal report.
In summary, while both an appraisal and a CMA aim to determine a property's value, an appraisal is a more formal and comprehensive evaluation conducted by a licensed appraiser, often required for mortgage approval. A CMA, on the other hand, is a less formal analysis provided by a real estate agent to help buyers and sellers make informed decisions.