Whether buying or selling, the first question that comes during a real estate transaction is:
What’s the value of this home in today’s market?
Depending on several factors, the answer to that question can change throughout the year. Because the real estate market is always changing, a comparative market analysis, or CMA, is essential to finding out the best estimate for your home’s worth in the current market.
What is a CMA?
CMA stands for comparative market analysis, also known as comps in the real estate industry. Real estate agents use the MLS to search for recently sold properties and compare them to the house being listed. Agents search for features that are most similar to your home in order to get the best estimate of what potential buyers will be willing to pay.
What factors are looked at to determine value?
- House and property specifics. When setting a listing price for a home, your real estate agent will tour the house and property, learn about upgrades or renovations, and use that information to find comps. The number of bedrooms, bathrooms, and square footage is needed to find homes of similar size and style.
- Sales price. The listing price and sales price of a home can sometimes be dramatically different. Consider what similar homes SOLD for, not how much they were first listed for.
- Recent sales. It is not helpful to look at what your neighbor’s house sold for last year, even if the style and size of the house are similar to yours. In order to be as accurate as possible, agents look at the closing price of homes sold within the past 180 days.
- Location of similar homes. Location is another essential factor to take into consideration. When looking at comps, the other houses should be in the same neighborhood, or within a mile radius of your home.
Is a CMA the same as online home value calculators?
Online home value calculators can be a good starting point when you first start considering selling your home. Because it is an automated online program, not everything is taken into account, including unique features of your home. When working with an agent who understands the market and how to research past sales, you get a more in-depth comparison.
Ready to get a CMA for your home?