CMA vs. Appraisal

Clients will constantly ask, "What is this house worth?" You need to be careful how you answer.Avoid Exaggeration: A common unethical trick is "buying the listing." This is when an agent tells a seller their house is worth $1,200,000 (when it's really worth $900,000) just to get them to sign a contract. This is misrepresentation.Terminology: Never call your estimate an "Appraisal" unless you are also a licensed appraiser. Appraisals are highly regulated technical reports; CMAs are market estimates.There is a difference between "Puffing" and "Misrepresentation."Puffing: Subjective praise that acts as a sales pitch (e.g., "This is the most beautiful view in the city!"). This is generally legal.Misrepresentation: A false statement of fact or value. If you tell a buyer a property is zoned for commercial use when you know it is residential, or if you knowingly inflate the value to help a buyer get a larger loan (mortgage fraud), you have crossed the line.The Consequences: This is considered Fraud, Breach of Contract, and Breach of Trust. It can lead to your license being revoked and civil lawsuits where you are personally liable for the damages.