A comparative market analysis is a crucial tool for estimating the value of real estate. If you are a homeowner who is interested in listing your property for sale, a CMA will help you determine an appropriate selling price based on the sales prices that similar homes in your area have received in the market. The purpose of a CMA is to estimate the value of a home for sale relative to comparable properties in the area. A real estate agent will analyze recently sold homes within a specific location, examine several factors, and analyze the data through various tools to achieve fair market value.
Keep in mind that performing a CMA is not a standardized process. Each real estate agent will have their tools and reference data sets, but whatever the methodology used, it is undoubtedly one of the services you should ask your agent about before selling your home. Listing brokers use the language of the real estate industry to determine the sale price. However, homebuyers should also use compensations, with the help of an exclusive buyer's agent, to help formulate the right amount to offer.
Although CMAs are commonly used to price homes for sellers, they can also help buyers determine how much they can offer for a home. Prior to joining Rocket Companies, she worked as an English teacher for the New York City Department of Education and as a licensed real estate agent for Brown Harris Stevens. If you opt for an FSBO (for sale by the landlord) or buy your home without an agent, obtaining a CMA can be a little more complicated. For those who are thinking of selling their For Sale By Owner (FSBO) home, it's worth noting that you won't be able to conduct a CMA on your own, as, among other things, access to the MLS is exclusive to real estate agents.
Determining a fair sale price for your home is one of the most challenging aspects of selling real estate. By collecting this information, not only is it easier to create a CMA report, but it also helps to create a narrative for use in marketing. A full CMA will provide information on why homes are sold in your area, how long they were on the market, and the difference between their sale price and the sale price, and will show a low, medium, and high sale price for your home. By basing prices on recent comparable home sales, CMAs help ensure that sellers list their homes for the prices buyers are willing to pay.
A comparative analysis of the real estate market or CMA, as it is more commonly known, is a valuable report that gives buyers and sellers an idea of the fair market value of a property, based on what other homes in the area are selling for the price. It's important to note that a home won't always sell so a CMA (or even a real estate agent) predicts. A comparative market analysis (CMA) is a process that real estate professionals use to determine the market value of a property by comparing it to similar properties that have been recently sold as well as those that are currently for sale. With this resource, your agent can collect recently sold home prices from local offsets, giving you a good idea of a home's value and what can realistically sell in your specific market.
While a real estate agent creates a CMA to estimate the value of a home, an appraisal is an appraisal of the home that must be performed by a licensed appraiser. A real estate agent or broker performs comparative market analysis in order to determine a list or sale price based on comparable sales and market trends. A local real estate agent will use recent sales, pending sales, contingent sales, and current homes for sale to set the right price for a property. He goes on to point out that while there is no way to know how much a home will sell, especially in multiple bid situations, Shanley notes that “a CMA is necessary for sellers to determine a starting point (the selling price) and, for buyers, decide how much to offer.