Comparative Market Analysis (CMA)
A Comparative Market Analysis (CMA) is a professional estimate of a property's current market value, prepared by a real estate agent or broker. It involves analyzing recent sales of similar homes—known as comparable properties or "comps" within the same neighborhood or area. The CMA takes into account factors such as:
Location
Size and square footage
Number of bedrooms and bathrooms
Condition and upgrades
Current market trends
A CMA provides homeowners with a realistic price range for their property if they’re considering selling. It is not a formal appraisal, but it is a valuable tool based on local market knowledge and professional expertise.
Appraisals
An Appraisal is a formal property valuation conducted by a licensed or certified appraiser, usually required by lenders during real estate transactions. Unlike a CMA, an appraisal is a third-party, unbiased assessment of a home’s market value for loan underwriting purposes. Appraisers use similar data comparable sales, market conditions, and property features but their process follows strict regulatory guidelines.
Key Difference: Professional Opinion vs. Certified Valuation
A CMA is a real estate professional’s opinion of value, typically used to help set a competitive listing price.
An Appraisal is a licensed appraiser's formal valuation often required by banks or lenders to secure financing.
Both tools are important, but they serve different purposes. A CMA is helpful for sellers to price their home strategically, while an appraisal protects lenders by confirming the property’s value before approving a mortgage.
