Appraisal vs. Realtor CMA: What Each One Is For in Georgia

A comparative market analysis from a real estate agent and an appraisal from a certified appraiser both end in a number, and both lean on recent sales. They are still different things, built for different jobs, and Georgia law treats them differently. This post explains what each one is, what the law requires of each, and how to decide which one you need.

Key Takeaways

• A CMA is a pricing tool. Georgia law lets a licensed agent give a price opinion or market analysis in the ordinary course of brokerage business, as long as it is not called an appraisal.
• An appraisal is regulated work. Only someone holding a Georgia appraiser classification can perform real estate appraisal activity, and the appraiser board's rules dictate how the work is done.
• An appraiser's fee cannot depend on the number. A contingent fee is grounds for discipline under O.C.G.A. 43-39A-18(11).
• A CMA is not barred from court. Georgia lets a non-expert testify to value with a reasoned basis. The real question in a dispute is which opinion persuades the judge or jury.
• Choose by the stakes. A CMA is a sensible way to talk through a list price with an agent. When someone else is going to challenge the number, an appraisal is built for that.
• Appraisers are not interchangeable either. What you are handed, and who built it, vary more than the price does. There are five questions that tell them apart.

What a CMA Is

A CMA, sometimes called a comparative or competitive market analysis, is an agent's opinion of the price a home should list or sell for, usually supported by a set of recent nearby sales and current listings.

Georgia law expressly allows it. Under O.C.G.A. 43-39A-24(b)(2), a licensed real estate agent can give a broker's price opinion, a competitive market analysis, or any other written or oral opinion of the recommended listing, lease, rental, or purchase price of real estate, in the ordinary course of brokerage business, without an appraiser classification. The condition is that the opinion is not referred to as an appraisal. The real estate license law backs that up: under O.C.G.A. 43-40-25(b)(15), an agent who represents a price opinion as an appraisal, without holding an appraiser classification, commits an unfair trade practice.

A good agent's CMA can be a very useful document. It reflects what the agent sees in the market, including buyer traffic and competing listings, and it is built for the decision in front of you: where to price.

What an Appraisal Is

An appraisal is an opinion of value developed by a state-classified appraiser under the rules of the Georgia Real Estate Appraisers Board. Under O.C.G.A. 43-39A-24(a), no one may engage in real estate appraisal activity in Georgia without that classification.

The board's rules are specific. Rule 539-3-.02 requires, among other things, that I:

• obtain every piece of data from a reliable source and verify it from at least one more;
• put the county tax assessor's 100 percent market value in my file;
• state any list prices for the property within the preceding year, and list any sale of the property within the preceding three years;
• use the most recent comparable sales, presumed to be those within the year before the effective date, unless I explain a different choice;
• look for comparables first in the same subdivision and then within one mile, unless I explain a different market area;
• keep the net adjustments to a residential comparable within 15 percent of its price and the gross adjustments within 25 percent, or explain why not;
• sign a certification that the analysis is my own unbiased opinion, that my pay does not depend on the value I report or on reaching a stipulated result, and whether I personally inspected the property.

Those rules do not govern an agent's CMA. That is not a criticism of CMAs. It is the difference between a pricing conversation and a regulated opinion that has to show its work.

Independence

An appraiser's pay cannot be tied to the answer. Georgia law makes it grounds for discipline to accept an assignment that depends on reporting a predetermined value, or to accept a fee that depends on the value reached or on what happens because of it.

A CMA is a tool of the brokerage business, prepared in the course of listing or selling a property. That is its job, and there is nothing wrong with it. It is simply a different job from giving an independent opinion to someone who needs one.

Which One Holds Up in a Dispute

This is where a lot of writing on the subject gets Georgia law wrong. A CMA is not automatically excluded from court.

Under O.C.G.A. 24-7-701(b), a witness does not need to be an expert or a dealer to testify to a property's value, as long as he or she has had an opportunity to form a reasoned opinion. The appraiser licensing chapter also does not apply to a person testifying to value in a Georgia court, under 43-39A-24(b)(5). An owner can give an opinion of value, and so can an agent who knows the property.

What changes in a dispute is scrutiny. An expert's opinion is admitted under O.C.G.A. 24-7-702 only if it rests on sufficient facts or data and reliable methods, reliably applied. And whatever is admitted, the judge or jury decides how much to believe it. An opinion that cannot explain why these sales, why these adjustments, and why this date will not carry much weight against one that can. That is the reason to use an appraisal in a divorce, an estate division among heirs, or a tax appeal: it is written to be cross-examined.

When a CMA Is Enough, and When It Is Not

A CMA is usually enough when:

• you are choosing a list price with an agent you trust, and nobody else needs to rely on the number;
• the house is typical for its neighborhood and there are plenty of recent similar sales.

An appraisal makes sense when:

• another party will read the number and has a reason to challenge it, such as a spouse, a sibling, or a county board;
• you are selling without an agent and want an independent anchor for your price;
• the property is unusual, such as acreage, a custom build, or a home with few true comparables;
• you want a value that is not connected to anyone's commission.

One Appraiser Is Not the Same as Another

Deciding on an appraisal is only half the decision. Two appraisals of the same house can be two different things, and the difference is not obvious from the outside.

Part of it is what you are handed. One kind of report is a form with boxes checked and a conclusion at the bottom. The other is a narrative report that shows its reasoning, sale by sale and adjustment by adjustment, so the next person to read it, a sibling, a county board, an attorney, can follow how the number was reached instead of taking it on faith.

The larger part, by a good margin, is who built it, and no price tells you that. So ask. Has this appraiser done your specific type of assignment, and how many? Have they been deposed or testified? Will they personally perform the inspection, or send someone else? What will the effective date of value be, and why? And does the fee depend in any way on the outcome, a question that should draw an immediate no.

Ask me those, and then go check the answers rather than take mine. I have been in the field since 1997 and licensed as an appraiser since 2000. Field work first, then the review chair, deciding whether other appraisers' reports were defensible, and then Chief Review Appraiser at Act Appraisal and at eValuation ZONE, both national appraisal management companies, where disputed values and the complex, high-risk, and unusual files were mine to settle. I built and ran a wholesale appraisal desk at 1,700 orders a year, ran appraisal management operations, performed FHA field audits, and have worked as an expert in litigation. Georgia classifications are searchable through the Georgia Real Estate Commission and Appraisers Board, and every certified appraiser in the country appears on the ASC National Registry, which is free and public. Look me up, and look up anyone else you are considering.

There is one part you can only judge on the day. I talk with the owner at the property rather than photographing the house and leaving, and you should come away from that visit understanding what I was looking at and why it moves the number.

If you are about to list and want an independent number first, my pre-listing appraisal page explains how that assignment works.

FAQs: Appraisal vs. CMA

Is a CMA the same as an appraisal?

No. Georgia law lets an agent give a price opinion or market analysis without an appraiser classification, but it cannot be called an appraisal. An agent who presents one as an appraisal, without holding an appraiser classification, commits an unfair trade practice under O.C.G.A. 43-40-25(b)(15).

Can a real estate agent testify about what my house is worth?

Yes, if the agent has had an opportunity to form a reasoned opinion. O.C.G.A. 24-7-701(b) does not require a value witness to be an expert. How much weight the opinion gets is up to the judge or jury.

Does an appraiser have to follow rules an agent does not?

Yes. The Georgia Real Estate Appraisers Board's Rule 539-3-.02 sets requirements for data verification, comparable selection, adjustments, sales history, and a signed certification. Those rules apply to appraisals, not to an agent's price opinion.

How do I tell one appraiser from another?

Ask whether they have done your specific type of assignment and how many, whether they have been deposed or testified, whether they will personally perform the inspection, what the effective date of value will be and why, and whether the fee depends in any way on the outcome. Then verify the answers through the Georgia Real Estate Commission and Appraisers Board and the ASC National Registry, both free and public.

About the Author

Scott D.W. Wiley is a Georgia Certified Residential Real Property Appraiser, CR432840, and is FHA approved. He was formerly licensed in six other states: Illinois, Kentucky, Michigan, Minnesota, Missouri, and Ohio, all now inactive. He has been in the business since 1997 and licensed as an appraiser since 2000, coming up through the Midwest as a field appraiser and then as a review appraiser, and serving as Chief Review Appraiser at Act Appraisal and at eValuation ZONE, both national appraisal management companies, where he was the final technical authority on disputed values and on complex, high-risk, and unusual property. He also built and ran a wholesale appraisal desk at 1,700 orders a year, ran appraisal management operations, performed FHA field audits, and works as an expert in litigation. Today he runs Go2Appraiser, serving metro Atlanta and Northwest Georgia with estate, divorce, bankruptcy, tax appeal, pre-listing, land, and investment property valuations. He inspects every property personally and writes his reports the way he spent his career demanding other appraisers write theirs.