What is the difference between a CMA, BPO, and an Appraisal?

A CMA is a Comparable Market Analysis and is also known as a Broker’s Price Opinion (BPO). A CMA is performed by a licensed real estate broker (or an appraiser) who analyzes similar/comparable recently sold, listed and expired properties, for a prospective or existing client, to formulate an estimated “probable sale price” of a property. A CMA is not the same thing as an Appraisal. An Appraisal is performed by a Real Estate Appraiser and is an “opinion of value”, or expressed in terms of how much a property is worth.

The methodology of performing a CMA and an Appraisal is the same when it comes to researching and selecting similar properties to compare to the subject property. The major difference between the two is, appraisals are required for federally regulated lending transactions when CMAs are not permissible. A couple of other differences between the two is that Appraisers are typically concerned primarily with analyzing recent and similar sales, and they make monetary adjustments to the comparable sale prices - to account for differences between the comparable properties and the subject property. In other words, Appraisers add and subtract quantifiable dollar amount adjustments to the comparable sales, to account for their characteristic differences to make them more like the subject property being appraised. On the other hand, the automated CMA computer programs used by real estate brokers, take the unadjusted sale, list, and expired price averages of the comparable properties to arrive at an estimated probable sale price of the subject property.

In summary, when listing your home for sale, it is not necessary to have it appraised to estimate a probable sale price. What is important, however, is to list with an experienced Realtor who is knowledgeable about pricing and well versed in negotiating contracts and repairs. Once your home is under contract, the buyer’s lender will then send an appraiser out to appraise your home.

If you are ready to buy or sell, call Mary Staton or Bert Ward - they’ll be happy to answer any questions.