What Is a CMA? How Realtors Calculate Comparative Market Analysis
What Is a CMA? Defining Comparative Market Analysis
CMA stands for comparative market analysis. A comparative market analysis is something that a real estate agent uses for estimating property value based on other houses that have sold nearby. Since the market can change so quickly, it is important to estimate the fair market value of your home.
Some of the things that go into determining a home’s market value include the square footage, number of bedrooms and bathrooms, location, the condition of the property, and more. If you are working with a real estate agent to put your house on the market, the realtor will use a CMA to make sure you are listing the property for the right price.
Additionally, real estate agents have to factor market conditions into your home’s value. The real estate market can change quickly, so real estate agents need to use recent homes that have sold to determine the best price to list your home at.
Calculating a comparative market analysis is a complex process, but an experienced real estate agent will be very comfortable and competent at completing a CMA. First, a real estate agent will compile the recent, local properties that have sold and see if they are comparable to your property.
If you are in a townhouse or condominium, your real estate agent might see if any other units in your building or complex have sold recently, or in nearby complexes with similar amenities. If you live in a single family home, they might look for houses in the surrounding area that recently sold. Then, once the agent has pulled these comps, they will add or subtract certain items that will affect the listing price. For example, if your home is larger in square footage to a comparable property, that will add value. If your home has a smaller lot, that might reduce value. The real estate agent will calculate these adjustments for each comparable property to determine the fairest market value for your home. Then, depending on the current market, they can determine the final list price.
CMA stands for comparative market analysis. This tool is something that real estate agents use for evaluating a fair market value for a property. They then use this information to list the home at the best price.
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