Chapter 8 - Comparative Market Analysis

Question 0

What is each section of a CMA, and how does it affect value?

Answer 0

Categories of comparables
. Sold within previous 12 months
. Currently on the market
. Expired during previous 12 months

Question 1

What’s the differences between a CMA and an appraisal?

Answer 1

CMA is never called an appraisal

Appraisal determines specific value at specific time; CMA is a value range right now (never historical)

Appraisal accounts for property condition; CMA doesn’t.

CMA only uses limited market data approach to valuation while appraisal uses cost, market, and income approaches to determining value.

Appraisals only account for prices paid for sold properties while CMA accounts for properties that haven’t sold too

Appraiser is not in the transaction for pecuniary gain while CMA is prepared by person who will make money on the transaction

CMA’s account for FSBO’s; Appraisals don’t

Question 2

What is the criteria for selecting comparables when preparing a CMA?

Answer 2

. Location
. Size and shape of lot
. Landscaping
. Construction quality
. Style
. Design
. Age
. Square feet of gross living area 
. Number of rooms 
. Kitchen
. Other space
. Condition
. Garage
. Other improvements

Question 4

What is CBS and CIA in appraising and preparing CMA’s?

Answer 4

Comparable better = subtract

Comparable inferior = add

Question 5

Calculate total living area

Answer 5

Add the total area of the structure, then determine the square footage of non-living area (garages, porches, etc.), and subtract those from the total area of the structure to get the total LIVING area.