The Difference Between a CMA and an Appraisal

Is it a comparative market analysis (CMA), or is it an appraisal? These real estate terms are often confused with one another, but they're actually quite different. Understanding the distinction is important for everyone involved in a real estate transaction.

Comparative Market Analysis (CMA)

• Definition: A real estate agent's estimate of a home's value based on comparable properties
• Purpose: An informal estimate that helps sellers set listing prices and buyers make offers
• Who: Real estate agents
• When: At the beginning of the selling process
• Cost: Usually free

Appraisal

• Definition: A professional evaluation of a property's value performed by a licensed appraiser
• Purpose: A formal assessment used by lenders to determine mortgage loan amounts
• Who: Licensed appraisers
• When: Required by the lender before approval of the mortgage
• Cost: Usually performed for a fee