What is a comparative market analysis? Everything you need to know about CMA.
If you’re considering selling your home in the near future you’ve probably started thinking about how much you could sell it for.
While you may have tried out some online home value estimators like Zillow Zestimates most of these tools won’t provide you with the most accurate estimate of your home’s value.
This is because their algorithms only take into consideration the data that’s available to them while overlooking critical factors like your home’s condition unique features and location that only a human can evaluate.
What is a Comparative Market Analysis?
A Comparative Market Analysis is a technique for assessing a home’s estimation in view of ongoing deals of comparative properties in a similar region.
A CMA should be based on recent sales. Timing is everything. Real estate markets are always in flux and constantly changing. The more recent the sales, the better. Ideally, comps should have sold within the past two or three months. However, for properties in rural or unique neighborhoods, agents may need to look at comps further out. What’s even better? An agent that provides data from current pending sales to provide you with the most up-to-date pricing data.
is a tool used by real estate agents to help them determine what a property is worth.
They do this by assessing the features of your property and finding comps or comparable properties that are similar to your own.
It’s important to note that a CMA is just one method for determining a property value. known. The Income Approach is typically used for investment properties and estimates the value of a property based on the income it generates.
What should a Comparative Market Analysis include?
When all is said and done a Comparative Market Analysis will likely include three to four comparable properties. These properties should share similar features to your own home have recently sold and be in close proximity to your home. The analysis will include the sold price of the properties along with a proposed listing price for your property. Some agents may also include other market data including days on market and pricing trends.
All Homes Have Unique Characteristics
A comps analysis relies heavily on the similarity of properties but almost every home will have some unique characteristics.
Comps should be as similar as possible
adjustments should be made to take into account any special features your home has.
Can you get a Comparative Market Analysis for free?
if you’re using a comps analysis as a way to interview an agent be wary of choosing an agent solely because they provide you with the highest price. Sellers who do this usually come to find out the number wasn’t accurate to begin with.
Is Comparative Market Analysis accurate?
A Comparative Market Analysis is a great tool for real estate agents to determine a home’s current market value. Different comps will bring about different results.
This will bring about the best results. Indeed, even still, the market is continuously changing and the business cost of your home will probably contrast with the cost you requested.
What to Consider When Choosing Comparable Properties:
Location Location Location
When it comes to choosing comparable properties, location is key. Comps should be located within the same neighborhood and subdivision, if possible. If not in the same neighborhood, then in the same general area.