An examination of the prices at which similar properties in the same area recently sold.
A CMA is prepared for clients to help determine a price to list when selling a home or a price to offer when buying a home. Since no two properties are identical, agents adjust for the differences between the sold properties and the one that is about to be purchased or listed to determine a fair offer or sale price. Essentially, a comparative market analysis is a less sophisticated version of a formal, professional appraisal.
Listed properties, especially if no similar properties were recently sold are also included when conducting a CMA. Please remember that listing prices only indicate what the seller hopes to get for the property and do not necessarily reflect what it is worth.
Expired listings are often included as well to show similar properties where the listing expired. This information can be useful when settling on a list price. While a CMA is not an official appraisal, there are a great deal of similar practices and methods that an appraiser would use to arrive at a reasonable value for the property.
When conducting a CMA, it's important to consider factors such as the property's location, size, condition, and unique features. This helps in making necessary adjustments to compare it accurately with recently sold or listed properties. The goal is to ensure that the price is competitive yet realistic, reflecting both the current market trends and the property's intrinsic value.
Moreover, a well-done CMA can provide insights into market dynamics, such as whether it's a buyer's or seller's market, and help clients make informed decisions. It also assists in setting expectations for both sellers and buyers regarding potential negotiation ranges and the time it might take to sell or purchase a property.
In summary, a Comparative Market Analysis is a crucial tool in real estate transactions, offering a strategic overview that aids in achieving successful outcomes for both buyers and sellers.