Comparative Market Assessment
It’s time to decide on an asking price. You know that setting the right price for current housing market conditions is crucial, and you’ve been told that overpricing can spell death for a new listing. But how do you determine the fair market value of your home if you don’t know the intricacies of your local housing market?
A real estate market analysis is often called a comparative market analysis (CMA). It’s basically an analysis of the current market values of properties, comparable to a property you are looking to buy or sell. A CMA is a helpful tool to determine the market value of your own property, especially if you are trying to decide an accurate selling price prior to listing.
Wouldn’t it be great if you had some insider knowledge? Some sort of real estate cheat sheet that gives the inside scoop on the local real estate market?
What is a CMA and how do you get one? Better known as a comparative market analysis or a comparable market analysis, a CMA helps determine what your home is worth compared to similar properties in the area that have sold in the last 4-6 months. In a nutshell, a CMA will help you understand how your home will fare against the competition. We will connect you with a real estate professional that will provide a CMA to save you the hassle of trying to figure out what your home’s worth.
To determine the value of your home, a real estate agent will compare your home to homes with similar square footage, age, amenities, upgrades, condition, and those which are located in the same neighborhood or a similar area. The more similar these comps, the better the price estimation. Keep in mind, CMA’s are very subjective because it may be hard to account for things such as the home’s curb appeal or what the home’s located near (ex. across from a railroad or power station). Finding a good agent that can help estimate the value of your home, based off these factors, is vital in determining the best list price.
Attempting to price your own home is rarely a good idea. We will help you find a real estate agent who will determine your home’s worth so you can be sure you’re getting the best price. Without the help of a real estate professional, your emotions can come into play, skewing the price. For example, you might feel that a recent remodel should increase the value of your home but if the remodel is specific to your taste and doesn’t appeal to the masses, it could actually bring down the value of your home. An agent will look at homes that have recently sold, without an emotional attachment, and recognize which attributes will appeal to the majority of buyers.
Other factors an agent will look at when compiling a CMA include when a property sold and certain characteristics of the home. For example, when looking at the sold dates of other properties in a fast moving markets, an agent will focus on sales from the last 2-3 months vs. longer. The characteristics of your home must closely match the characteristics of the comparable homes. For example, comparable homes should have the same number of bedrooms and bathrooms and a similar sized lot. Keeping comps as similar as possible give you the best footing for generating the best list price.
You should always do a real estate market analysis, whether you are buying or selling a property and I’ll explain why. This analysis will help you understand the current housing market, how much properties similar to yours are worth, and if it’s an investment property, how much you can charge for rent.
The information gathered through a real estate market analysis or CMA helps the seller choose a listing price and helps buyers see if the asking price is too high, low or reasonable. A CMA should always be conducted to make sure both buyers and sellers are getting a fair deal, based on the value of the property.
By comparing similar properties on the market, you will be able to accurately put a price on a home.