Comparative Market Analysis, more commonly known in the real estate market as a CMA, is an evaluation report of similar properties that have been recently sold in the surrounding area of a particular property intended to be sold or bought. A CMA helps determine the current market value of a property and is performed by a real estate agent. It should be noted that a CMA is different from an appraisal, which is performed by a licensed appraiser.
Most real estate agents offer to do a CMA free of cost in exchange for a listing. A CMA can vary from a two-page list of comparables to a 50-page comprehensive guide depending upon the person who is performing it and the property that is under scrutiny.
CMA for Real Estate
What’s in a CMA?
The industry standard for a CMA usually consists of the following data:
Active listings are an indicator of how much competition there is in the market. They do not help determine the market value directly since every listing price determined by the seller will not be a realistic one. More often than not, most properties will sell less than the listed price.
Pending listings are part of a CMA because they help give a general idea of the current market trend. These are listing that have not yet closed but are currently under contract. If your property is listed above the price of these pending listings, you might have to wait a little longer to close your sale.
This shows the homes or properties that were sold during the past six months. These make a part of the comparables that will help determine an accurate market value for your home. Take a deep look into these and discuss with your appraiser to set an appropriate listing price.
Withdrawn or Canceled Listings
Properties that are taken off the market for any reason fall into this category. These are usually priced higher than the median comparable sales. Seller’s remorse, unrealistically high asking prices, repair requests, a large number of days on market are some of the many reasons listings are withdrawn or canceled. All these are taken into consideration by appraisers while preparing a comparative market analysis.
These are the listings that were on the market for too long and did not sell due to unreasonably high price or lack of marketing. Some of these might be re-listed at a lower price as new listings so watch out for these when preparing a CMA.
Sales that are similar in nature to your property and take place in the same vicinity as yours are the most accurate indicator and contributor of a CMA. Comparable sales are those in which the properties have a similar square footage, a similar age of construction and similar facilities such as a swimming pool or a garden. Another important factor while looking at comparable sales is location. A home with a better view will always be priced higher than other properties with similar facilities, age and square footage.