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What Is A CMA?
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A CMA or Comparative Market Analysis Is a deep analysis of the market, and sold properties similar to your home in your area. These reports are used to help determine the price of your home and what they market is currently supporting for homes similar to yours. This will help you determine what top dollar for your home should be.
Why Do I Need a CMA?
Sometimes there is a difference between what you think the home is worth and the actual value. You want to make sure that your home is priced correctly from the beginning. An overpriced home will have a negative impact on your house and its ability to sell. A detailed CMA helps you determine the value of your based on facts and information about the neighborhood recent sales and other information.
How Much Does A CMA Cost?
A CMA will be done for you by your real estate agent at no cost to you. This is a comprehensive report that involves the agent researching market data and gathering information. The agent will be researching home similar to yours in your area that have recently sold, are currently on the market, ones that are under contract as well as properties that expired or didn't sell. A Good agent will pull homes that are similar in square footage, features and lots size and condition to your home. Keep in mind none of the ones they pull will be identical to your home but a good agent will be able to adjust these prices to show comparable values. For example, if your home has a 3 car garage and the sold property has only a 1 or two car garage will have its value adjusted to reflect that difference.
The Right Comparable Properties Are Important
Picking the wrong properties for a CMA will creates the wrong price range for your home. Your listing agent will share their comparables. Things looked at include:
- Style of home: Modulars cannot be compared to houses, and a one story ranch is hard to compare to a two story Victorian.
- Neighborhood : The CMA will show comparables in the same or similar neighborhood to yours the closer to your property the better.
- Date of sale: The market changes constantly, the more recent comparables are the better. Typically agent s will go back not more than a couple months in sales history.
- Location: Views, water access, and even the neighborhood a home is in, all play a role in the value of a home.
- Finished square footage: The comparable homes should be within 20 percent plus or minus, of your home's square footage.
- Number of bedrooms and bathrooms: Comparing homes with 4 or 5 bedrooms is fine but, homes with one and two bedrooms do not compare well with 4 or 5 bedroom homes.
- Age of the property: New homes make a good comparison for new home construction or other possibly five or less years old. Comparing a new home to one built in 1950 is not going to give you the appropriate price range for your home. Things change as a home ages, including the age of the homes systems building materials and construction techniques and other factors. These things all play a role in determining the value of a home.
- Condition of the home: You shouldn't try to compare a "handy-man Special with a properly maintained and well cared for home.
- Lot size: Lot size will also play a significant factor in determining the value of the property. For example, two identical homes will have different values if one is sitting on two acres of land and the other has just a small yard. Kepp in mind that all lots are not the same and the usability of the lot will also affect value.
Things to Keep in Mind About a CMA
Some of the features your home has that you may think add value, may not add any value to the property, and in some cases could be considered to detract from the value to some buyers. The best example of this is a swimming pool. While you may love your pool and think it adds value to your property, it may be a turn off to some buyers who don't want the added expense or maintenance that comes with it.
Pricing your home correctly, right from the start is key in making sure that you get your home sold for top dollar, in the shortest amount of time, so you can achieve your goals.
A good CMA from an quality agent will show you the data you need to make smart decisions regarding the sale of your property. You will have the data for how long homes like your take to sell, what price they close at and how many other homes like yours are on the market. All of this information will help you decided with the guidance of your real estate agent how you should approach the selling price of your home.
