If you are considering selling your home, you likely have questions: What’s my home worth? How much buying power will I have to purchase my next property? Conversely, maybe you’re making an offer on a home and want your agent to help determine if the listed price seems appropriate for that property. A CMA will help you answer your questions.
What is a Comparative Market Analysis Study?
A Comparative Market Analysis (CMA) is a tool real estate agents use to help both our sellers and our buyers, usually offered as a complimentary service to aid the buying and selling process.
To create a CMA, we begin with a subject property, usually the one you’re listing or the one you’re purchasing. From there we look for comparable properties, or comps. When looking for comps, we consider many variables. In addition to the standard features – number of bedrooms and bathrooms, square footage, lot size, for example, we’ll look for more individual characteristics. Does the property have a view? Outbuildings? How old is the home? Has it been recently updated?
Current Market Value
Because a CMA is meant to be a snapshot of a property’s current market value, the goal is to get the most recent data that’s available. Ideally, we’ll find comparable properties that have recently closed sales. Since the real estate market is constantly fluctuating, the closer the sale is to the current date, the better. If not enough recently sold comparable properties are available, we’ll include homes in “Pending” status, i.e. homes that are under contract but not yet closed – if we can find out what price has been offered and accepted.
Determine Your Price Range
Once we’ve found comparable properties to put into the report, we can generate a price range based on their sold or contracted price. From there we can narrow it down by comparing more details. Are there granite counter tops? A large deck? New fixtures? Luxury features in the primary bath? This information can help you and your agent determine where in the range you will price your home – or what kind of offer you’ll be making.
A Comparative Market Analysis can also be useful when you’re determining your buying power after the sale of your home. A “Seller’s Net Proceeds” estimate can be produced as part of the CMA process once a list price is determined, by factoring in your remaining mortgage balance and selling costs. This is a general estimate of course, until you see what price your home actually brings under contract.
If you have questions about the real estate market, your home’s value, and how it affects your next steps, talk to an agent about a CMA.