Appraisals vs Comparative Market Analysis

A comparative market analysis (CMA) or Broker Price Opinion (BPO) can be touted by some agents to be the same thing as an appraisal when it is not. Simply put;  Real Estate Agents (including myself) do not have the experience or training to do an appraisal. If a seller wants an appraisal of their properties value they should hire an appraiser.  An appraisal prepared by an appraiser is a complete, professional,  and legally defensible product.   Grantham Appraisal Service has more discussion on this point.


Appraisers are prepared for and most commonly hired by: 

  • Mortgage companies (most common)
  • Buyers
  • Estate attorneys

Appraisals can be prepared for many purposes such as tax assessment appeal, divorce settlement, estate settlement, relocation, pre-listing appraisals, residential investments, condemnations, foreclosures, home sales, and other reasons.

The most common type of appraisal utilized in real estate sales is when a mortgage company hires an appraiser.  Simply put, a mortgage company wants to know if an agreed upon price between a buyer and a seller that results in a loan….well they want to know if its worth the risk.  An appraiser lets them know if it is or isn’t and if there are any conditions that should be corrected prior to closing (flaking paint, leaky roof, etc.).  The mortgage company does not want (or should not want) a buyer to get into a property with issues that might result in the buyer moving into an unsafe home or one that simply is not habitable.

For the best local web based resource on appraisals, I recommend Grantham Appraisal Service.  Within that site are a number of of sections within that site that do a very good job of explaining various aspects of appraisals.  Here is just a sampling.

Comparative Market Analysis

Because of the reasons I’ve just listed, the typical process I use to assist a client in developing a listing price is to:

  1. utilize my extensive knowledge of real estate sales and local market conditions
  2. review comparable properties for sale within our local multiple listing service.
    1. look up and make copies of comparable properties that have sold
    2. note obvious similarities or differences
  3. discuss the information with the client and work together with the client to reach a consensus listing price.

My goal is to assist the seller in coming up with a fair price for their home that either has the potential for their home sitting in the market place without showings or conversely under-pricing a home.