Learn the Difference Between a Comparable Market Analysis and a Professional Home Appraisal

Professional Home Appraisal

A Professional Home Appraisal is an unbiased opinion of a home's value. Appraisals are used in purchase and sale transactions and are often used when refinancing a mortgage. In a purchase and sale transaction, the purpose of an appraisal is to determine if the home's contract price is relative to the home's condition, location, and features. In a refinance, it assures the mortgage company that the home is worth the amount the buyers are asking to pay for it. Because a mortgage is essentially a loan, so the bank needs to make sure they aren’t loaning money on a property for more than it would resell for.


Comparable Market Analysis (CMA)

A Comparable Market Analysis is an examination of the subject property and similar property used to determine the market price or list price of a home that is getting ready for sale. CMA’s are performed only by real estate agents and are provided to homeowners, so they can understand what their home would sell for in the current market. 

Professional Home Appraisals and CMA’s use the same information when trying to determine the value of a home. They both consider location, overall condition and will use similar comparables to the property being evaluated. But there is one thing a Professional Home Appraisal can’t take into consideration that a CMA can.


Market Condition

The Professional Home Appraisal must evaluate the home based on adjustments made from comparable property that has recently sold. They can make adjustments ONLY based on property that has recently sold. The CMA also evaluates the home based on adjustments made from comparable properties that have recently sold, but the CMA will also consider a 4% increase or decrease in the market if there is one.

Because it’s a reality when you list a home for sale. If you’re in a declining market and the comparables that are being used sold 6 months ago, you must adjust for how much the market increased or decreased between that time. If you DO NOT adjust for increasing or decreasing market conditions, your home will be listed at an incorrect price.

Another feature that differs from a Professional Home Inspection and a CMA is the level of condition of a home. Home Appraisers use a scale of poor, moderate and good in terms of rating a home's condition. A Real Estate Agent knows that there is a scale of 1-10 on the condition of a home.

Not all homes are made the same. There is a difference between poor condition and REALLY poor condition. They can also price the difference between a hack job renovation or a professional renovation that cost $40,000. Real Estate Agents can take those things into consideration and come out with a more accurate reflection of what the house should list for in today’s current market.

A CMA isn’t a better option than a Professional Home Appraisal. We recommend that if you really want to be sure of your homes market value than you should have both performed and decide from there, also taking into consideration homes in your area that are currently listed for sale and market conditions.


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If you are interested in having your own Comparable Market Analysis performed by an agent, give me a call at (306) 552-7047 or fill out my online contact form below! 

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