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CMA—Comparative Market Analysis
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Comparative Market Analysis
The first step to selling your home is to get a skilled local Real Estate professional like a Raider Realty agent to provide you with a CMA or Comparative Market Analysis.
A comparative market analysis (CMA) is an estimate of a home’s value based on recently sold, similar properties in the immediate area. Real estate agents and brokers create CMA reports to help sellers set listing prices for their homes and, less commonly, to help buyers make competitive offers. Individuals can perform their own comparative market analysis by researching comparable properties
Why Automated Valuations Are Bad
Have you ever wondered why most of the internet sites that provide an “instant home valuation” such as Zillow or Trulia are typically off by 20% to 40%? The simple reason is that a computer analysis of home values can only take into account tax data, a trailing indicator. In an appreciating market, a trailing indicator will always put a home’s price too low. Why? These types of reports depend upon tax records. When a home is sold, the sale does not work its way into the tax data for as long as nine months after the sale.
What Goes Into A Comparative Market Analysis?
The analysis begins with us compiling a list of at least three similar properties within the same area that have sold in the last 3 – 6 months. If there isn’t enough sales data or if the potential purchasing price of a home is being calculated, we may also select properties that are currently listed on the market or pending. Even expired listings can be used to demonstrate the kinds of prices that are too high to attract interested buyers.
A comparative market analysis is a crucial tool for estimating the value of real estate. If you’re a homeowner who is interested in listing your property for sale, a CMA will help you determine an appropriate asking price based on what sales prices similar homes in your area have received on the market.
The Raider Realty CMA Advantage
The real knowledge and understanding within a CMA are primarily due to the experience and expertise of a local real estate professional. Internet valuations are typically “quantitative” only. They take into account only numbers. The value of a Raider Realty Realtor is that their analysis is both quantitative using much fresher sales data than tax data, but more importantly, it is primarily qualitative.
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