One of the physical characteristics of real estate is, nonhomogeneity, meaning that no two parcels of real estate are exactly alike.
A CMA is a comparison of the prices of properties recently sold, currently on the market and properties that did not sell. The comparison must be with similar in location, size age, style, and amenities to the seller's or buyer's subject property.
Lender's will use a broker's price opinion in conjunction with the loan portfolio valuation, loss mitigation, short sales, or collections. While the CMA or BPO are prepared by the real estate broker, using some of the same techniques and methods used by an appraiser, it should be noted that both are not as comprehensive or technical as an appraisal and should never be presented as a formal appraisal.
Benefits to the Seller
The CMA is merely a guide to help the seller learn what’s happening in their local market, so they can better understand where their home fits in term of price ranges, based on location, features and condition. This is a good assessment of what your house could potentially sell for.
It can also help a seller decide if they should rehab the property prior to placing on the market or sell in its current condition to receive the maximum value desired.
Benefits to the Buyer
CMAs are not only for prospective sellers. Buyers should consider requesting a CMA for properties they are seriously looking at to determine whether the asking price is a true reflection of the current market. CMAs can help buyers better understand the local market as well as sellers.
It will serve as a guide to help determine:
· How much to counter offer?
The CMA brings Market Reality to both the seller and buyer.
Benefits to the Lender
BPO's are popularly used in situations where lenders and mortgage companies believe the expense and delay of an appraisal to determine the value of properties is unnecessary.
Today's guest blog courtesy of Bernita McKinion
Today's guest blog courtesy of Bernita McKinion
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