A Comparative Market Analysis (CMA) is a report that estimates the value of a property by comparing it to recently sold properties nearby that have similar locations, square footage, and features. A CMA is a crucial tool for estimating the value of real estate and is used to help sellers set listing prices for their homes and help buyers make competitive offers. A CMA compares a property to other homes similar in location, size, and features. Ideally, a CMA uses recently sold homes from the same subdivision, but finding homes that sold within the last three to six months in the immediate area can be difficult if youre in a low-volume or rural real estate market. In these cases, a formal appraisal might be a better option.
A CMA is completed by a real estate agent, the seller, or the buyer using comparable homes to estimate a price. This estimated price can then be used for negotiating a sales price. The first step for an agent preparing a CMA is to find three homes that have sold recently (within the past 6 months at most, but preferably 3 months). These three homes should be as similar and located as closely together as possible. A CMA is a complex process that requires technical knowledge of the overall market and how various aspects of real estate impact how much a property is worth.
A CMA report can also be used to assist buyers in coming up with competitive offers for properties they’re interested in purchasing. Although CMAs are typically used to price homes for sellers, they can also help buyers figure out how much to offer for a home. A CMA can be a useful tool in negotiating asking prices. However, if a buyer is trying to purchase a home in a seller’s market, in which inventory is low and buyer demand is high, they may struggle to negotiate regardless of what the report finds.
A CMA is completed by a real estate agent, the seller, or the buyer using comparable homes to estimate a price. This estimated price can then be used for negotiating a sales price. Real estate professionals have access to the industry’s multiple listing service (MLS), unlisted properties, tax records, and real-time data, which allows them to find far more accurate information compared to what might be posted on public domain listing sites.
