Homeowners who want to assess the value of their homes have two options: conduct a comparative market analysis (CMA) or an appraisal. Typically, a homeowner can choose between these two analyses only when selling his home. For other purposes, such as obtaining a mortgage, the bank will require that an appraisal be conducted. Still, these methods both have advantages and drawbacks that are important to consider when determining how to price your home for sale.
CMA. A CMA is performed by a broker or agent. The broker gathers information from the multiple listing service which collates data about listed properties. The analysis reviews similar homes in the relevant neighborhood that have recently sold or are currently for sale. Brokers compare general appearance, features, size, and price range when looking at multiple homes. The agent or broker analyzes these “comps” and the amount of time it took for similar homes to sell. This information helps the seller establish a reasonable price point for his home. If the seller prices his home above other comps, it is not likely to sell at that price.
Appraisal. Unlike a CMA, an appraisal is performed by a licensed and certified appraiser hired by the bank when a buyer applies for a mortgage. The appraiser is a neutral third party even though he is hired by the bank. The appraiser is obligated to make observations about the home in order to determine its fair market value. The purpose of the appraisal is to ensure that the bank does not provide a mortgage that exceeds the home’s value. The appraiser establishes a value by comparing the home to others homes of similar size, age and condition. When an appraisal is lower than the asking price of the home, the bank will not offer the mortgage to the buyer. The seller will generally then reduce the asking price of the home to complete the sale.
Homeowners can play a role in maximizing their chances for a high appraisal value. By making obvious repairs and ensuring that the home is in proper working order, the homeowner can take steps to help secure a mortgage from the bank.
The experienced team of attorneys at the Law Offices of Mark Weinstein, P.C. can help you litigate your real estate claims. Contact Mark Weinstein and his colleagues at (770) 888-7707 or visit them at http://www.markweinsteinlaw.com to find out how they can advise you.