Estimating the Market Value of Your Home
Most real estate brokerage professionals will offer an estimated market value of your property when creating a listing contract (seller brokerage agreement). After all, you need to set a listing price. But it’s important to understand this is not a professional appraisal of your home. Only individuals licensed as real estate appraisers are permitted to professionally appraise your home.
What is a Comparative Market Analysis?
A Comparative Market Analysis (CMA) is a method of property valuation real estate professionals use to estimate the value of residential properties, which helps sellers set a listing price for their property. CMAs examine the prices at which similar properties in the same area have recently sold.
The report you are given must include a statement indicating:
- the purpose of the report
- that a real estate appraiser with a licence from the Real Estate Council of Alberta (RECA) did NOT prepare this report
- that it is NOT a real estate appraisal report
- that no one should refer to or rely on the report as an appraisal report
- that the report does not comply with RECA appraisal standards
- that the report must not be used for financing, civil proceedings, income tax purposes, or financial reporting purposes
CMAs must only provide a range of value for the property, not an exact value. As a seller, the purpose of a comparative market analysis is to help you make a decision on how to price your property for sale or rent. You would then use the CMA’s range of value to set a listing price for your property. You cannot use the CMA to obtain mortgage financing for a property.