Get your personalized Comparative Market Analysis
Interested in buying or selling? No two homes are identical, which is why choosing a sales price or offer price for a home can be challenging. That’s where the comparable market analysis, or CMA, can be useful.
What is a CMA?
The CMA is a side-by-side comparison of homes for sale and homes that have recently sold in the same neighborhood and price range. This information is further sorted by data fields such as single-family or condo, number of bedrooms, number of baths, postal codes, and many other factors. Its purpose is to show fair market value, based on what other buyers and sellers have determined through past sales, pending sales and homes recently put on the market..
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How is the CMA created?
CMAs are generated by a computer program supplied by your real estate agent's multiple listing service (MLS). The MLS is available to licensed members only, including brokers, salespeople, and appraisers, who pay dues to gain access to the service's public and proprietary data, including tax roll information, sold transactions , and listings input by all cooperating MLS members. Listing agents generate CMAs for their sellers, and buyer's agents create them for their buyers so both sides know what current market conditions are for the homes they're interested in comparing.
How accurate are CMAs?
The CMA is a here-and-now snapshot of the market, based on the most recent data available, but it can instantly be rendered obsolette by a new listing, or a change of status in a home with the same criteria. Why? The market is constantly changing - new listings, pending sales, closed sales, price reductions, and expired listings. CMAs can vary widely, depending on the knowledge and skill of the person inputting the seach parameteres to the software as well as the number and type of data fields that are chosen. That means some features may not be included. As informative as the CMA is, it should only be used as a tool and should not substitute for your real estate professional's knowledge and advice.
In a neighborhood of similar homes, why is one worth more than another?
That's the questions that's teased buyers and sellers for ages, but the answer is simple. Every home is different. When a home is sold, a willing seller and a willing buyer have just announced to the world the value of that home. From there, other similar homes are benchmarked, but other factors come into play. The most important are: Location - The closer a home is to jobs, parks, transportation, schools, and community services, the more desirable it is. Size - Square footage impacts home values because they're built using more materials. Larger lot sizes mean more privacy. Number of bedrooms and baths - Over time, median homes have grown larger. Decades ago, household members shared bedrooms and baths without complaint, but today, familites want more privacy. The median home purchased today is a three-bedroom, two-bath home. Features and finishes - Features such as outdoor kitchens and spa baths make a home more luxurious. A home finished with hardwood floors and granite countertops is going to cost more than a home with carpet and laminate countertops. Condition - The closer a home is to new construction, the more it will retain its value. It's perceived as more modern, up to date and perhaps safer. Homes that are not updated or in poor repair sell for less. It's a good idea for homeowners to keep their homes updated and in top repair. Curb appeal - From the street, the home looks clean, fresh, and inviting. Fresh landscaping and flowers won't change the size or location, but they certainly add charm. When two homes are identical in the same neighborhood, a higher price may come down to something as simple as views or paint colors. Valuing a home will never be an exact science, but if you buy wisely, keep your home updated and in good repair, you should recoup most if not all of your investment.
Why do you need a Real Estate professional?
If you're planning to sell your home, it's probably crossed your mind to try to sell it yourself and save the sales commission. But, there are some very good reasons why that would be a mistake. According to housing industry experts at HomeGain.com and Realtor.org, more homes listed by real estate agents are sold than homes marketed by owners, and they sell more quickly and for more money. Homes listed by real estate professionals get more exposure and their sellers get more support. Real estate professionals offer many advantages:
- They’re trained and licensed professionals.
- They have experience in your neighborhood and your market.
- They have oversight from brokers and state licensing officials.
- Their job is to advise you the best way to reach your goals.
- Their continuing education keeps them up-to-date on housing issues.
- They know how to present your home and deal with buyers.
- They know how and where to market properties.
- They know how to overcome typical snags that occur in all real estate transactions and closings.
- They understand state-required disclosures and look out for your best interests.
- They understand personal safety and security for your belongings during showings.
- They know the best resources to make transactions go more smoothly, from bankers to homestagers to contractors.
- They have the most accurate data sources – the MLS, the only data repository that has the most up to-date listing and sales information.
- They know how to negotiate.
- Their job is making real estate transactions successful.
When you market your own home, you have to make the time to do all the jobs a real estate professional would do, and you'll be competing against other sellers who have real estate professionals by their sides. If you can't leave work to show your home, or you feel it requires more knowledge and experience than you have, you can't go wrong by hiring a well-respected real estate professional.