Many homeowners turn to what's known as a CMA or competitive market analysis when trying to figure out a home sale price. While a CMA can provide a good general ballpark figure, it is not an acceptable valuation tool for a variety of reasons. One is that the valuation is generally made by someone (usually an agent) with an interest in affixing as high a price tag as possible since he or she works for commission that's tied to that valuation.

Another reason a CMA is inadequate in calculating a home sale price is its relative vagueness. A CMA doesn't adhere to the same strictures that a formal appraisal must, so it cannot possibly juggle all of a home's variables at once. It may overlook critical value-added features and improvements by working only from a macroscopic standpoint. Why did you build that granite countertop in your kitchen if a CMA fails to take it into account when calculating your home's worth?

A Fair Home Sale Price

For the reason stated above, most of the time it's the buyer who's cheated out of money by an unscrupulous agent looking to fatten up his or her take from the sale. The difference with a home appraisal is that its practitioners agree to abide by a code of ethics that a realtor could disclaim altogether. Thus, if you're a buyer leery of paying more than you should, fight for your right for a fair appraisal!

Ultimately, a home sale price hinges on far too many factors for a generic valuation to encompass. You may have to shell out several hundred or even thousands of dollars for the privilege, but an appraisal will by all accounts save you money in the long run. What's more, it will establish a price point from which to work as you build in your own improvements and prepare for the day when you sell your home to someone else--and take a handsome profit.