Albuquerque Real Estate Questions: What’s the Difference Between an Appraisal and a CMA?

Albuquerque Real Estate Questions: What’s the Difference Between an Appraisal and a CMA?

Tego: First off Tracy, what is a CMA versus an appraisal?
Tracy:
So interesting. So an appraisal is by an appraiser, right? Mm-Hmm, an appraiser and they are hired typically, not always, but typically they’re licensed and they are hired by the lender to go and evaluate the property mm-hmm and do a very, very long detailed report that tells what they believe the market value of the property is because the lender is typically not here to go look at the house. Right. They don’t go and look at it. They rely on the appraiser to give us a value estimate to make sure that the lender’s making a good loan. Yeah.
Tego:
Right. So once, once a, a buyer applies for a loan, a mortgage for a property, the, the lender’s gonna hire an appraiser to go out there and justify the value to the bank to make sure that the bank is not loaning on something that, that the value isn’t there. Right.
Tracy:
Right. And an appraisal is a formal process. A market analysis or comp comparative market analysis is, is usually done by a realtor. Correct. Right. Like us and we are just doing a relevant sales search mm-hmm <affirmative> to see what other properties have sold for and what that might indicate that this house will sell for. Correct. Right.
Tego:
Yeah. So really it, it’s a marketing analysis and, and, and, and it’s not a cut and dry, I mean, even an appraisal to a certain extent, you know, you, you could have two separate appraisers do an appraisal on a property the exact same day and come up with different values. Usually they’re gonna be in the same range, but
Tracy:
They have a general criteria. The appraiser has to follow. And just as a side Bargo, tell us about the qualifications to be an appraiser.
Tego:
Well, to be an appraiser. And that is a actually a challenge is especially last year with, with the, the boom in sales last year, there was a shortage of appraisers. Appraisals were taking a very long time because there’re not a lot appraisal on the market, but, but you it’s a two year apprent apprenticeship to become an appraiser. Right. And so it’s, it’s a, quite a process that the challenge has been that appraisers that are licensed are so busy. They don’t have time to TA they didn’t, they weren’t taking on many apprentices apprentices in the last few years is what I’ve been hearing now. I’m sure there’s some out there. So your appraiser and you’re out there screaming at the, the, the recording here saying no, I did it. I did it well. Great. That’s great. But yeah, it, it is quite a process to become an appraiser. It’s actually a much more lengthy, difficult process than it is to become a realtor.
Tracy:
Right. So there you go.