The difference between CMA and Appraisal
When you want to sell or buy a house in Phoenix AZ area, one term that you will always hear is CMA and Appraisal. You may ask what are the differences and how it will affect me to buy or sell a home?
The difference between a CMA and a real estate appraisal report is that one is done by your real estate agent and one is done by a licensed real estate appraiser.
What is a CMA?
A CMA is an estimate of your home’s current value (JUST OPINION) done by your real estate agent to establish a selling or offer price when you decide that you want to sell or buy a property. This service is normally offered free of charge and without obligation by real estate agent. A CMA should only be used as a reference for deciding at what price you should list or buy your dream home for.
Read: What is Comparative Market Analysis (CMA)?
What is competitive market analysis cost?
As a Realtor® in Phoenix area, I provide complimentary comparable market analysis at no cost to you. I appreciate these requests as an opportunity to establish a relationship that I hope will result in business in future. Feel free to contact me, if you want to know how much your home is worth today.
What is an appraisal?
A real estate appraisal is done by a 3rd party licensed real estate appraiser and is most often used by lenders when issuing mortgages for refinancing or buying a home. The appraisal is NOT FREE and the cost is vary by lender. The appraisal is designed to protect the bank, so that it doesn’t loan too much money for more than what it’s worth in any market. A real estate appraiser’s only job is to give an unbiased OPINION of value of the subject property. An appraiser will use similar methods in coming to a property value as your broker but they must also follow strict licensing and industry guidelines established by the Federal Housing Finance Agency, which regulates federal housing loan guarantors such as FHA, VA and housing loan purchasers Fannie Mae and Freddie Mac as well as follow the Uniform Standards of Professional Appraisal Practices (USAP).
How much does an appraisal cost?
Since an appraisal is done by a 3rd party licensed real estate appraiser. There is a cost associated with the appraisal service. The cost of a home appraisal varies by the size and location of your home among other factors. Generally you can expect to pay around $350 to $450 for single family home under 3,000 square feet in Phoenix area. Unique properties, large houses, and remote locations typically cost more to appraise.
Conclusion
Simply put, you need both a CMA and an appraisal to determine market value when you are buying a home with mortgage. A CMA helps you decide what you should offer the seller. An appraisal determines what the lender is willing to lend to help you purchase a home.
Swee Ng, Realtor and Phoenix East Valley resident specializing in win-win real estate transaction through great communication and fighting for his clients’ best interest. After all, this is more than real estates, this is about your life and your dreams.
If you are looking to buy or sell your home in Phoenix AZ area, we hope you will consider us. Contact us today for complimentary consultation.
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