The Competitive Market Analysis
Why is it that the expression “appraisal” isn’t slung around by realtors the way that it used to be thirty years ago? Well, it turns out there’s a pretty solid reason. Appraisal has come to mean an official statement of price opinion. The alternative is the competitive market analysis given by your realtor or broker.
It is all about getting the right opinion of the price the market will support for a sale. Appraisal refers to an official opinion from a certified professional but it is still an opinion of price. It can be submitted on an application for home finance because the finance industry will trust it based on the fact that a licensed appraiser created it.
An experienced and worthy professional realtor will have a very good idea of prices. Even so, the opinion that they give is not usable for applications but they should have an accurate enough opinion to put a property on the market and have it sell. Or, as a buyer’s agent, calculate the right price to bid for a property without over-bidding.
Appraisal Means Authority
The distinction and split between appraisal and market analysis came about because of the savings and loan crisis of the 1980s. Since then there has been a clear difference in the usage of the terms.
So what is it that a realtor can do for you without calling in a certified appraiser? Quite a lot actually and it is one of the fundamental reasons that the profession is so valuable in all real estate transactions.
Your realtor should have enough experience to judge the market conditions in your community, whether you are selling out of it or buying into it. They should be able to give you accurate advice to complete the transaction at the highest and best value for a given property.
The Multiple Listing Service (MLS) to which they subscribe is the inside track on what is being sold in your area, for how much and when. There are websites that give you information about sales and listings such as Zillow and Trulia.com but the most comprehensive information is always within an MLS.
Websites do a great job of tracking public record information but your agent’s MLS will have access to the inner details about what is happening in the slice of the market that it covers. A realtor must understand the market beyond the obvious and that is the advantage that experience gives.
Different Stage Means Different Need
Word play and legalistic definitions aside your realtor has the knowledge and the support to give you the information to help you buy or sell your home. When it comes to official documents, yes you do need to have an opinion of value from a licensed appraiser. Otherwise, the wisdom of your experienced real estate professional should get you to the right value for your side of the real estate transaction.