What is a Comparative Market Analysis?
A comparative market analysis in real estate, often referred to as a CMA, is basically an in depth report, done by a real estate agent before listing a property, that provides a prospective seller with information comparing their home to other similar homes in the market. The general goal of a CMA is to determine the best price to list a home for and what to expect the home to actually sell for.
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The amount of detail in a comparative market analysis can vary from a few pages to lengthy and extensive reports. Typically this will be determined by your real estate agent’s experience, level of understanding, and the amount of data they feel necessary to provide an accurate assessment of the market.
To begin, your Realtor will first analyze your property to determine the elements that need to be compared. This initial inspection usually isn’t invasive or excessively detailed, but acts as a starting point for the analysis.
Once your real estate agent has made an assessment of your home, they will then research the market using MLS and any other necessary means to find similar homes that have sold, are pending sale, are active listings, or listings that have been withdrawn, expired, or cancelled.
After the research is complete, a qualified agent will be able to make an accurate estimation of the value of your property. Hiring an agent that is truly qualified is very important, as the comparative market analysis and pricing is one of the first and most essential steps in selling your home.
It is very important to note that a comparative market analysis is not the same thing, nor should be treated the same, as an appraisal, which must be conducted by a licensed appraiser.
Though a CMA is typically done when trying to determine the price to ask when selling a home, buyers may also request a CMA from their real estate agent to determine the best price to offer when purchasing a new home.
Comparative Market Analyses are very important in both the buying and selling process, and most Realtors will be able to easily provide their clients with this information.
