What should a licensee avoid referring to a competitive market analysis as?

Referring to a competitive market analysis (CMA) as an appraisal is something that licensees should avoid because an appraisal and a CMA serve different purposes and are conducted differently. An appraisal is a formal assessment performed by a licensed appraiser, wherein the appraiser uses standardized methods and procedures to determine a property's market value based on various criteria, including comparable sales, property conditions, and current market trends.

In contrast, a CMA is prepared by real estate professionals, such as brokers or agents, to give a general idea of what a property might sell for in the current market based on similar properties that have sold recently. By using the term "appraisal," a licensee could inadvertently imply that the CMA has the same level of authority, accuracy, and legal validity as an official appraisal, which may not be the case. This misrepresentation can lead to misunderstandings about the document's purpose and its reliability, potentially exposing the licensee to liability or disciplinary actions under real estate laws.

Understanding the distinction between these terms is crucial for maintaining professionalism and adhering to industry regulations.