Carmen tells her sellers that her competitive market analysis is an estimate of value. What is incorrect about this statement?

Carmen's statement that her competitive market analysis (CMA) is an estimate of value is highlighted as being potentially misleading because CMAs should not be referred to as appraisals. This distinction is important because an appraisal is a formal valuation conducted by a licensed appraiser, often with specific methodologies and regulatory criteria, resulting in a definitive value statement. In contrast, a CMA is usually based on comparable sales data and serves as a tool for estimating market value, but it does not carry the formal authority or the rigorous process of an appraisal.

Understanding this difference reinforces the importance of terminology in real estate practices. Since a CMA is inherently just an estimate and not a legally binding valuation, referring to it as an appraisal can lead to misunderstandings about its reliability and purpose in the real estate process. Such a miscommunication might mislead clients into expecting greater accuracy or legal standing than what a CMA actually offers.

The other options address different aspects of CMAs, but do not directly relate to the mischaracterization present in Carmen's statement about the CMA being an estimate. Hence, clarifying the terminology helps ensure that clients have realistic expectations and understand the non-binding nature of a CMA.