What is the difference between an appraisal and a CMA from my agent?

Who makes each one, and for whom

A CMA is made by a real estate agent, usually as part of winning or serving your listing. It looks at recent nearby sales, current listings and pending deals, and helps you pick a price that will attract buyers. It's informal by design. There's no required format and no license category just for CMAs.

An appraisal is made by an appraiser. For a lender, Fannie Mae requires the appraiser to be state-licensed or state-certified, with that license active as of the report's effective date. On a loan, the appraiser's client is the lender, not you, not the buyer and not either agent.

That one difference, who the work is for, explains most of the rest. Your agent is on your team. The appraiser is not on anybody's team. The appraiser is the person in the stands with a stopwatch and no jersey.

The appraisal also has a fixed effective date, the date the value applies to. A CMA is a snapshot your agent may update every week while the house is on the market. That is useful for pricing, but it means a CMA from March and an appraisal from June are answering questions about two different markets.

Agents can advocate. Appraisers can't.

Appraisers follow USPAP, the Uniform Standards of Professional Appraisal Practice. As the National Association of REALTORS explains it, appraisers must be competent, independent, impartial and objective, and must not advocate for the cause or interest of any party.

Agents, on the other hand, are supposed to advocate. A listing agent's job is to get you the best result. That's a good thing. It also means a CMA can lean toward hope, especially when a seller has strong feelings about their 1987 wallpaper and the agent wants the listing.

Neither one is wrong for its job. A CMA asks, "What price will get this sold well?" An appraisal asks, "What does the market evidence say this is worth as of this date?" Those answers are often close. When they aren't, the appraisal is the one the lender uses.

How the two compare side by side

A CMA often includes things an appraisal weighs differently, like how much buyer traffic a listing got or what's about to hit the market. Agents know their pipeline, and that's real value. An appraisal leans on closed sales, because closed sales are the ones where someone actually wrote the check.

California's appraiser license levels

In California, appraisers are licensed by the Bureau of Real Estate Appraisers (BREA). There are four levels:

• Trainee: works under a supervising appraiser, on property the supervisor is qualified to appraise.
• Residential: limited scope, defined by federal rules for which properties and loan amounts it covers.
• Certified Residential: broader residential scope, also set by federal rules. This is my license level.
• Certified General: all types of real estate, regardless of transaction value or complexity.

You can look up any California appraiser's license on BREA's website. It takes about a minute and is a smart habit before you hire anyone for a private appraisal.

Which one do you need?

Use this as a quick guide:

1. Deciding on a list price? Start with your agent's CMA. It's built for that.
2. Worried the buyer's appraisal won't support your price? Consider a pre-listing appraisal. It gives you an independent read before you set the price, and it shows you the comps a lender's appraiser is likely to see.
3. Settling an estate, trust or divorce? You usually need a formal appraisal with a stated effective date. Ask your CPA or attorney what the situation requires.
4. Getting a mortgage? The lender orders the appraisal. You can't swap in a CMA.
5. Comparing the two? Look at the comps each one used. If the CMA leans on active listings and the appraisal leans on closed sales, that alone can explain a gap.

What I see in the field

When a CMA and an appraisal disagree, it's usually not because one person is bad at math. It's because they started with different sales or answered different questions. The CMA might lean on the highest list prices in town. The appraisal has to stick to what closed and measure each difference from real sales.

Facts over feelings. A good CMA and a good appraisal both show their work. If you can see which sales were used and why, you can judge either one for yourself. A pretty chart with no addresses is a brochure.

One more thing I tell sellers: list price is a marketing decision, and value is a measurement. You are allowed to list above the evidence if you want to test the market. Just know that the buyer's appraiser will not be grading your strategy. They will be grading the sales. If those two things are far apart, it is better to find out from your own pre-listing work than from a low appraisal three weeks into escrow, when everybody already picked out paint colors.