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What is a CMA?
What is a CMA?
A comparative market analysis (CMA) is a document prepared by real estate professionals to help determine the selling price of a home by comparing it to recently sold homes in the same area. In order to create a CMA, one needs to look at the price of recently sold, pending, and active listings that are similar (comparable) to the home they’re trying to sell. Comparative market analysis is an important process for those who are thinking about selling their house.
What Does a Comparative Market Analysis Report Include?
A CMA report will include active listings, sold listings, pending listings, and expired listings. Real estate agents use the property data as a benchmark to determine an appropriate listing price.
Sold Listings: Sold listing data is our primary source for determining price. Real estate agents use the data on sold houses similar to your property which have sold in the past 6 months to determine the price of yours.
Active Listings: Active listings are the currently listed for sale properties and we do not base our pricing off of currently active listings. When conducting a CMA, real estate agents take a look at the properties similar to their clients’ because these will be direct competition to our sale.
Pending Listings: Pending listings are houses under contract; they are no longer in the category of active listings, but they’re also not a closed deal yet. This kind of listing is not considered a comparable sale until the sale process is finished, and the final sales price is published in the public records.
Property features Real Estate Agents Consider when performing a CMA
Comparables are the houses that resemble yours in terms of age, size, condition, and location. Below are the house features most used in comparative market analysis to determine a property’s price:
Location: location is a very important aspect in preparing a comparative market analysis because the neighborhood in which a home is located has much to do with the valuation. A home’s view also plays a huge role in the CMA process. For example, a house that has a water view is worth more than a house that is surrounded by other houses or walls.
Square Footage: Real estate agents compare houses that have similar square footage. Adjustments can be made in a CMA if the house is proven to be larger or smaller in square footage when compared to similar houses.
Age: We compare the subject home with comparables of similar age.
Number of Rooms: If your house only has two bedrooms, but the other comparable houses have three bedrooms, then an adjustment should be made.
Condition and Updates: Kitchens and bathrooms that have been renovated recently add a higher value to the house. This also applies to flooring, hurricane shutters, pool condition, age of roof, age of HVAC, and other upgrades, which make a home more desirable to buyers, and therefore add more value to the home. Homes that have been well maintained and kept in excellent condition are worth more than homes that have been neglected.
Garage: There are many buyers who consider the lack of a garage space in a house to be a deal breaker. If the house does not have a garage, while the other sold comparables do, this affects the home’s value. Adjustments are also made for homes which have a three-car garage, which is more desirable to buyers.