When real property is part of a divorce, the question of value becomes one of the most critical and often the most misunderstood pieces of the puzzle. Attorneys, mediators, and divorcing homeowners frequently face two common options for determining that value: the appraisal and the comparative market analysis (CMA).
On the surface, these two tools might look similar, but they’re not interchangeable. Understanding what they have in common, where they differ, and which one is the right fit for your situation can make the difference between a settlement that holds and one that falls apart.
How They’re Alike
Both appraisals and CMAs aim to estimate the current market value of a property. They:
- Use comparable sales data, including recently sold properties similar in size, location, and features.
- Take current market conditions into account, including supply, demand, and interest rates.
- Adjust for differences between the subject property and the comparables, like square footage, upgrades, or lot size.
At their core, both are opinions of value, not guarantees. They’re based on the data available at the time, the methodology used, and the professional judgment of the person preparing the report. This is why two valuations of the same property, even done close together, can produce different results.
The end goal is the same, determining what a home is worth, but the path, level of formality, and the weight each carries are very different.
How They’re Different
While both provide an opinion of value, the process, standards, and intended use set them apart.
Appraisal
- Conducted by a state-licensed or certified appraiser who must follow strict federal and state guidelines.
- Required by lenders for most mortgage transactions; must be ordered by the lender through their approved process to ensure independence.
- Carries legal weight and can be used in court or for formal settlement purposes.
- Relies heavily on closed sales, with adjustments made based on condition and unique property features.
- Costs typically range from $500–$800+ and take several days to a week.
- Critical in litigation, refinance, or equity buyout situations; but a divorce appraisal cannot be substituted for a lender-owned appraisal when financing is involved.
Comparative Market Analysis (CMA)
- Prepared by a licensed real estate professional using MLS data and market tools.
- Primarily used for setting list prices, evaluating offers, or giving a market overview.
- No formal legal standing.
- Looks at active, pending, and expired listings in addition to recent sales to gauge market positioning.
- Often provided at little or no cost and can be prepared quickly.
- Helpful in early-stage planning but may not hold up in legal or lending contexts.
Appraisals for Divorce vs. Mortgage Financing
One of the most important points for divorcing clients to understand is that, for mortgage financing purposes, the lender cannot use a divorce appraisal, even if it’s brand new. Lenders must order their own appraisal through a regulated process to ensure compliance and independence. This is called a lender-owned appraisal.
An appraisal is also just a snapshot in time. Values can and do change, sometimes in a matter of weeks, because of market shifts, seasonal changes, or new sales in the area. That means the lender’s appraisal could come in higher or lower than the divorce appraisal.
If you’re relying on an appraisal for settlement purposes, ask:
- What happens if the lender’s appraisal is lower? Will the buyout amount be reduced? Could the refinance fall through?
- What if it’s higher? Will one spouse end up paying more than anticipated?
Including an appraisal contingency in the settlement can protect both parties if the lender’s valuation doesn’t match the agreed-upon number. Without it, you risk finalizing settlement terms that can’t be financed.
Which Serves the Divorcing Client Better?
The “better” option depends entirely on the purpose.
For litigation or settlement negotiations, an appraisal, especially one both parties agree to, is often the stronger choice. It has legal weight, it’s done by a neutral, credentialed professional, and it can be defended in court. Just remember: if financing is involved, the lender will still require their own appraisal.
For early-stage planning or market strategy, a CMA may be the right place to start. It’s quick, low-cost, and can help set realistic expectations before committing to the time and expense of an appraisal.
A Strategic Divorce Mortgage Planning Perspective
As CDLP® professionals, we know the method of valuation is only part of the equation. Timing, purpose, and agreement between all parties matter just as much.
Appraisals are best for formalizing value in refinance, equity buyout, or litigation scenarios. CMAs are best for exploring sale potential and understanding market positioning. And when financing is part of the picture, only the lender-owned appraisal counts, and it may not match the divorce appraisal.
Choosing the wrong method or poor timing can lead to contested values, stalled settlements, and even failed financing. Align your valuation strategy with both the legal and mortgage requirements from the very start.
Bottom Line
Both appraisals and CMAs have a place in divorce. The real question isn’t which one is “better” overall; it’s which one best serves the client’s current phase in the divorce process. And when financing is involved, expect a lender-ordered appraisal and protect everyone by building in an appraisal contingency.
Take the Next Step Toward Clarity & Confidence
Stay ahead of the curve in divorce real estate, and mortgage planning:
Connect with a Local Certified Divorce Lending Professional (CDLP®) – Work with an expert who can align your mortgage options with your settlement goals.
About the Divorce Lending Association
The Divorce Lending Association (DLA) is the leading national organization dedicated to training and equipping mortgage professionals in the specialty of divorce mortgage planning. Through the CDLP® certification, advanced education, and collaborative networking, the DLA empowers professionals to align legal, financial, and lending strategies for optimal client outcomes during and after divorce.
Legal Disclaimer
This article is intended for educational purposes only and should not be construed as legal, tax, or financial advice. Every divorce situation is unique, and laws vary by jurisdiction. Readers should consult with qualified legal, tax, and financial professionals before making decisions regarding property division, mortgage financing, or settlement agreements.
