Comparative Market Analysis: What Is it?

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Whether you’re searching for a home to buy, or placing your property up for sale, a Comparative Market Analysis (CMA) is a key asset in determining whether you have a successful real estate transaction. But what exactly is a CMA?


Comparative Market Analysis For Buyers

You can usually request a Comparative Market Analysis (CMA) from your buying agent. For each home being considered, the CMA gives the “going rate” to buy a house in that neighborhood, as well as provides details on other properties in your area, such as their age, condition, amenities, location, and square footage. More importantly, the CMA will also include the listing price for the properties that haven’t sold, and the final sale price for those that have.

When you are ready to make an offer, the Comparative Market Analysis gives an idea of what a fair range would be to open with, and can help you respond with a counter offer if you think the seller’s asking price is still too high.

Comparative Market Analysis For Sellers

You can request a Comparative Market Analysis (CMA) from most listing agents. They will take a walkthrough of the home to get a sense of its condition and integrity, suggest improvements that may ramp up its value, and use the Multiple Listing Service, a database that they have access to as an agent, to gather data on recently listed and sold properties in the area. The resulting Comparative Market Analysis then provides a price range for what similar properties in the area have sold for, along with the range for canceled and expired listings. It’s vital for you to know these in order to avoid listing your home too low, leaving money on the table, or too high, struggling to find a buyer, and eventually forcing you to slash the price to close a sale.

If you are planning to upgrade or remodel can also use a Comparative Market Analysis to see if the proposed changes will “over-improve” your property, compared to others in the neighborhood, causing you to spend more money on improvements than any buyer would be willing to pay at closing.

Summary

Although the kind of information a CMA provides sounds similar to what you would find from an appraisal or inspection, a CMA from an agent is not the same as either one. The agent will not be investigating as in-depth as a certified inspector, and they will be working under different guidelines than an appraiser.

 

 

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