When it comes to buying or selling your Sotheby’s Phoenix home, you’ll come across real estate terminology that’s used to determine valuation. Below are common terms you’ll probably see and what they mean.
Comparative Market Analysis (CMA)
A licensed real estate professional at Sotheby’s Phoenix prepares a CMA. This is usually used to determine a home’s listing price. But it should not be the only factor in deciding the listing price but rather a guide and a way to evaluate active listings as well as sold competition.
A CMA can also be used for loan modifications, short sales and foreclosure/REO purchases, value trend analysis, mediation and negotiation.
Broker Price Opinion (BPO)
A BPO is an estimate of what a property will probably sell for. Again, it’s prepared by a licensed real estate agent, including agents at Sotheby’s Phoenix. Like CMAs, BPOs can be used for a variety of purposes including loan modifications, short sales, and so on. This should not be the only way, though, used to value collateral when a mortgage is being generated for a real estate transaction.
Automated Valuation Model (AVM)
An AVM provides property valuations and are usually developed or used by lenders,l service appraisal staff and investors. Again, this should not be the sole method used to value collateral in a Sotheby’s Phoenix real estate transaction with a mortgage. But you can use an AVM as the sole valuation for other transactions such as refinances.
A licensed or certified appraiser prepares an appraisal which is their opinion of a Sotheby’s Phoenix property’s value. Appraisals are usually used for real estate transactions involving a loan and are required for most properties worth more than $250,000. Exceptions would be where no new money is involved.
Buying and selling a home is stressful enough. Add in all of these real estate terms, it can be overwhelming. That’s where a Sotheby’s Phoenix real estate agent, such as myself, can help you every step of the way.