Appraisal vs. Comparative Market Analysis (CMA)
Are these one and the same? Ask any real estate practitioner how the value of your home is determined, and he or she may supply you with the “pat answer” that goes something like this: “value is determined by what a ready and able buyer is willing to pay.” True? Suffice it to say, that may be an easy answer to a question that deserves far more discussion.
Who and/or what determines value is far from an exact science, and even while it is true that the bank appraiser and the *REALTOR® pull from the same database to produce their independent value assessments, it has been my experience that value, much like beauty, is in the eye of the beholder … The subjective selection of “comparable” sold homes used to provide evidence of the value of your home will ultimately determine the potential for lost proceeds to you at the closing table!
Let’s face facts, appraisers as well as realtors are human beings, and as such, we are the sum and substance of all our experiences, beliefs and predispositions. What properties I select in the interest of my seller client to support a full price offer, for example, may (and sometimes do) vary from those selected by the appraiser assigned by the buyer’s lender. If ever there is a critical time, where the success or failure of the sale of your home hangs in the balance, it is at this juncture, and it falls upon the experienced, learned and respected REALTOR® to tip the scales in your favor, by doing his or her job in demonstrating how pricing your home was determined responsibly. There is no substitute for experience (and determination) here, and I can personally say that I have found no greater sense of accomplishment in my service to clients as when an appraisal challenge poses itself, and ultimately results in a “meeting of the minds” between me and the assigned appraiser. It is a collaborative rather than adversarial nature that one brings to the task that always wins the day!
*the term REALTOR® has one, and only one, meaning: REALTOR® is a federally registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and subscribes to its strict Code of Ethics.
Linda Manter holds a Certificate for the successful completion of the Division of Community Education Program in Concepts of Residential Appraising, completed in May of 1987 at NHTI.