A Guide to Comparative Market Analysis
What is a Comparative Market Analysis? A Comparative Market Analysis (CMA) is a widely used home pricing tool containing an informal estimate of your property’s value. It is usually performed by a local, experienced real estate agent, who is familiar with your neighborhood. They will compare your property to similar properties recently sold in your area, usually within the past year. By comparing your property to those that have recently sold, your agent can determine an approximate market value for your home, which can be used in pricing your home.
Note: A CMA is not an appraisal and cannot be used to obtain a loan.
Why You Should Get a CMA Before You Put Your Home on the Market
If you are not aware of current market pricing and conditions in your area, you are playing a risky guessing game of pricing your home.
Overpriced homes can stay on the market longer than necessary, and may not sell at all unless the price is brought down to what the market will bear.
Under priced homes may sell quicker, but at the cost of leaving unnecessary money on the table – money you could use on your new home, or however you see fit.
How Much Do CMAs Cost?
Any fee for performing a CMA would be determined by the real estate agent providing the service. However, it is quite common for real estate agents to offer CMAs free of charge in exchange for the opportunity to introduce themselves to a potential home seller.
Should I Get More Than One CMA?
Depending on how confident you are in the first CMA, you may want to consult with multiple real estate agents to get a few different CMAs and get a better feel for the market value of your home. This can be a great way to price your home and interview a few real estate agents before choosing who will get your listing.
A word to the wise - If you do choose to get more than one CMA, don’t simply follow the advice of the CMA with the highest estimated value. Everyone wants to hear that their home is worth more, but the best CMA is the one that reflects the true market value of your home.