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Market Analysis vs. Appraisal | What’s the Difference?

When selling a house, especially if it’s the first time, you may come across some real estate lingo that is not familiar to you. If you become confused or have questions during the real estate transaction, having a well-trained and knowledgeable REALTOR on your side is your best asset. Your REALTOR will help you to have the best understanding of how the selling process works and that you receive a further explanation of any terms you do not fully understand.

One of the most common real estate terms sellers confuse when selling a house is the market analysis and appraisal. If you think these can be used interchangeably, you will want to continue reading. We’ve broken down the two processes for you to see the difference!

Market Analysis

You may also hear this referred to as comparative market analysis or CMA.  This is the process agents use to determine the best price range in which to list a house by using data from recently sold and currently listed similar properties ( also known as comps or comparables).  Therefore, this is a process performed by your agent to determine a competitive list price for your property.

The process is usually offered free of charge when agents are contacted by individuals interested in selling a property.

Southwest VA & Northeast TN Home Worth Highlands Realty


The appraisal process is initiated by the purchaser’s lender after you accept an offer on your home to determine the current value of the property. A licensed appraiser is a neutral 3rd party, who has no vested interest in the sale of the property. An appraiser will provide an unbiased opinion of the value of the property at the current time. The appraiser reports on the property’s condition, neighborhood, and information from similar properties to find the current value of the property by making more finely-tuned adjustments based on the amenities of the home. The purpose of the lender ordering an appraisal on the property ensures that the amount of money they are lending is not more than the property’s value. Therefore, the appraisal is a process performed by a 3rd party to determine the value of your house and that information is used as part of the purchaser’s loan approval.

Some sellers choose to have an appraisal of their house before listing it. Having an appraisal done yourself first will help to give you peace of mind that the list price you choose aligns with the property value of the house. When a property is very unique or in an area with few recent sales, having an appraisal can provide great information for determining the best list price. Also, having a recent appraisal could be used to help market the property if the list price is below the appraised value.

The cost of this process will vary. The purchasers will pay for the appraisal at closing unless the seller had agreed to pay closing costs and/or pre-paids on the Purchaser’s behalf. Also, if the seller chooses to have an appraisal before listing the property, they will pay the appraiser they choose.

Key differences between the two processes:

  • Market analysis is before the home is placed for sale vs. appraisal is after an offer is accepted
  • Market analysis is an agent process vs. appraisal is performed by a licensed 3rd party during the loan process
  • Market analysis is usually a free service provided by real estate agents vs. the cost of an appraisal will vary


The market analysis and appraisal are two different processes, but both are needed to give you the most accurate information of what your home is worth.

Are you thinking of selling your home in Southwest Virginia or Northeast Tennessee? Contact us to help get your home ready for the market!

Find Out What Your Home is Worth

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