Comparative Market Analysis Explained
What is a CMA report? It is a professional home value estimate.In the event that you are about to sell your house in Montalvin, California, or if you have been interviewing a few of the local real estate agents in a bid to get one of the best of them to list your home for sale, chances are high that you might have already come across the term comparative market analysis more times than you can remember. The longer you spend around agents, you might even come across some who prefer to use the term CMA.
What is a comparative market analysis?
Before going into the definition, let’s get a contextual element of the terms. We are pretty much looking at comparing different items in the market – from a layman’s point of view. Therefore, by definition, a comparative market analysis is simply an examination of the prices at which similar property to yours have sold for in your neighborhood in the past. The importance of the CMA is that it helps you and your agents figure out the price at which you can list your property when you are selling, or the price that you can compare when you want to purchase a new home in Montalvin. Two properties will never be the same, even if they look alike or have the same exact floor plan. One will have a different angle to the sun and so forth. There are so many elements that make houses different. As a result of this, Montalvin real estate agents have to take the differences and similarities into consideration and then adjust for the same before arriving at a fair price for the subject property.
CMA Example
If you have ever had to get an appraisal for a property, a comparative market analysis is something similar, perhaps with less sophistication.Say for example you want to purchase a house that is listed for $400,000. In the same neighborhood, there is a house with similar amenities and features (bedrooms, bathrooms, square footage, acreage, etc.) that is going for $375,000 next to a busy road, and another that is going for $365,000. Your Realtor will then consider all the features that are available in these houses, and settle on anything between $365,000 and $385,000, in the hope that perhaps the owner will be willing to settle for at least $10,000 less on their asking price.
While this analysis might come in handy, you must take into consideration the fact that it basically considers only the listing prices. This does not mean that it reflects what the houses are really worth or what they will sell for. Some of these decisions are objective, and will need deeper insight, and perhaps your tastes and preferences, for which no price can be affixed.
Contents of the CMA
As you are in deep discussion with your Montalvin real estate agent about the CMA for your property, you need to know what this report will tell you. You need to have some predetermined expectations so that you at least know what to look for.
The report will basically give you information on three important things:
- The prices at which similar houses to yours are going for.
- The length of time it takes to sell similar units.
- The difference between the final sales price and the actual listing price.
All this is useful information that will help you come to terms with the true picture of the market. The moment we think about selling our homes, most of the time we tend to be overzealous about it. This is particularly so for those who are just new to the industry. We all imagine our house as the perfect home for anyone, and we imagine we could sell it for a fortune and anyone would buy it in a heartbeat. However, the CMA gives you the true picture of what you are working with, what you are looking at, and if possible, it brings you down to earth.
Where can you get the comparative market analysis?
There are three common places where you can get the analysis to compare with your house. These are as follows:- CMA Websites
- Professional real estate agents
- Open House Shows
CMA Websites
These days there are lots of websites that have information about homes within different neighborhoods. You can actually get some of this information for free too.
Professional Real Estate Agents
Your real estate agent in Montalvin, CA should be able to perform an appraisal on your property on your behalf. It helps if you are working with professionals, for you will be able to get accurate information to work with.
Open House Shows
Open houses might not really be an accurate measurement to use in this case, but in the event that there is a house in your neighborhood, it is also a good thing to walk in and compare notes. They might not exactly be comparable, but you can learn so much from such viewings.