A CMA is a Comparative Market Analysis used by real estate agents to help with deciding on a sales price for a property they will be listing or maybe come up with a reasonable offer on a property to purchase.
The CMA is used to figure out where the market is in comparison to the home being evaluated. Let’s say you are buying and viewed a home you are interested in making an offer. A CMA would serve as a way to check comparable sales data of similar properties to make an educated offer. The same goes for a seller, it would be used to figure out where their property stands in regards to the market and determine an asking or listing price.
A CMA, Comparative Market Analysis, isn’t as simple as just plugging in some numbers and see what pops up, you really have to know what data your after and how to interpret it. Let’s take a look at a few keys items when going through the data.
- Know your subject property - If your a seller know the data on your home such as square feet, number of rooms, amenities, year built, upgrades, etc. It is important to be clear on your home as the subject, as this will be the base subject and will be compared to other similar properties.
- Find Comparable Properties - This is key to zeroing in on your goal of knowing where the home should be priced. Comparable properties should be similar in size, construction type, near the subject, year built, number of stories, etc… the closer the better for comparison.
- Make Adjustments - Not all data will be exactly like the subject property, some adjustments will need to be made. Maybe one house has one more half bath, extra garage, carport, covered patio or maybe is an exterior lot facing a busy street instead of an interior lot on a cul-de-sac. A Realtor® can really prove to be valuable when it comes to interpreting this data.
At the end of the process you should have a good understanding of the the market, which is represented by similar homes that have sold. This data should give you an idea of where the subject property stands in the market and therefor help when coming up with a sales price.
Now let’s be clear, this is not an alternative to an actual appraisal. Notice the word “value” or “worth” was not used in the description, the reason is clear… Realtors® are not appraisers and can not determine “worth,” “value,” or “opinion of value.” While a Realtor® will have the same access to the data as an appraiser, a Realtor® is not a licensed appraiser. Keep this in mind because there are a ton of gimmicks out there leading you to believe that they can determine your properties value or worth, which is not allowed and they are not in a position to do this. It would be like a cashier diagnosing you with a disease when in reality they are not a doctor.
A CMA, comparative market analysis, is a helpful tool I as a Realtor® use to help guide my clients to decide on a list price or what type of offer to make. It is using real data, not estimates, but actual data from similar properties. This is a tremendous tool I offer you so you are more in line with your pricing and in line with the market. So next time you hear the acronym CMA thrown around you can know a little bit more about it.
Again I hope this was of value and maybe you picked up a tip or two. My goal is always to be a resource and educate my clients so they can make informed & educated decisions.
Have questions about this or other topics, don’t hesitate to contact me.
Luis Cuevas, Realtor®
RE/MAX Cross Country
1990 Justin Road
Highland Village, Texas 75077
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