The comparative market analysis, or CMA, is a common tool used by real estate agents in assisting the seller of a home to determine fair market value. This report can not only accurately pinpoint a good starting price for your property, but also give valuable insight into market trends, selling tips and the expected time it will take to sell your home. The CMA takes the guesswork out of listing a house and provides useful selling facts in black and white.
Information about similar homes that have recently sold in your area is essential to the comparative market analysis. Homes sold more than a year ago may not represent current market conditions. Additionally, comparable homes should have the same type of traits as the subject property, such as age, size, number of bedrooms, amenities and condition. It's also important to gather data on homes that are within a 1- or 2-mile radius, depending on population density.
Once information on several similar properties is gathered, it's easier to pinpoint an accurate estimate of fair market value for your home. Comparables with differing features are adjusted in price to more accurately reflect the value of the subject property. The prices of the comparables are averaged out to determine an accurate price range to start at. This price range should serve as a starting point when putting the home on the market.
Days On Market
Another important factor in setting a price is to look at the average length of time it took to sell the comparable properties. Sellers who are not in a hurry may have the option of starting at the top of their price point. Conversely, a homeowner who is in a pinch to move on may want to price their home below the range suggested. Gathering data about the expected length of time to sell your home can help you gauge a price reflective of your time frame.
A CMA is an objective view of the selling facts and characteristics of your home. Although many homeowners take a subjective approach to pricing their home, it's important to use the gathered facts and information from the comparative market analysis and look honestly at your homes positive and negative features. Memories, fun times and sentimental values will be overlooked by homebuyers. The purpose of the CMA is to put your personal feelings of value aside and take a good look at a realistic selling price.
Meribeth Phipps has been a real estate broker since 2000, specializing in residential new home sales. She holds a bachelor's degree in business and marketing.