Can a Comparative Market Analysis Help You?
To get the most accurate estimate of how much you should list your property for, your real estate agent can provide you with a Comparative Market Analysis (CMA). A CMA is an informal estimate of market value, based on sales of comparable properties in your area. It generally takes into account various aspects of your home, including size, features and annual costs. Reviewing comparable homes that have sold within the past year, along with the listing or asking price on current homes for sale, should help you determine a fair sale price for your property. CMAs can include homes that are currently for sale and those which have recently sold. They can cover areas as narrow as one or two streets surrounding your home, or as broad as an entire subdivision. Most real estate agents will give you a CMA for free, hoping you'll list your home with them. Each CMA contains valuable information on several recent sales, including:
- How long each property stayed on the market
- How close the sale price was to the asking price
- Notes comparing each home to yours, i.e.; number of bedrooms and baths, approximate square footage, sizes of major rooms, amenities such as fireplaces and pools, age of the home, property taxes and more.
The CMA is an informative selling tool, but like any tool, it doesn't work by itself. For this reason, the CMA will always need to be interpreted by a professional or with complete objectivity by the seller or buyer. Remember, too, that the CMA is also a buying tool; it is considered just as seriously by the buyer and his or her agent. As you and your agent are going to use the CMA to ask the highest possible price for your home, the buyer is going to use it to find reasons to either choose or eliminate your home, and to arrive at the lowest price possible.
In more rural areas a CMA will not be as effective. Sometimes there may not be a home comparable that has sold within the county in the last year. In that case, be sure you rely on a local area expert that knows prices in your area.