What Is a Comparative Market Analysis?
Pricing your home right can be a daunting task in the ever-changing landscape of real estate “comps” — recently sold comparable properties. In order to get the most thorough, detailed, accurate valuation of your home, consider a comparative market analysis, or CMA.
If you’re not familiar with this invaluable tool or its components, we’re here to help. In this illustrated guide, we’ve incorporated examples and expert input from Carl Medford, a top real estate agent in the San Francisco Bay area, to explain what a CMA is and why it’s such an essential element in a seller’s strategy.
What is a comparative market analysis (CMA)?
A comparative market analysis is a tool that real estate agents use to calculate the value of a home by evaluating its features, size, location, age, and other details in relation to similar properties that have recently sold. Its primary purpose is to compare a property against nearby recently sold comps in order to determine an appropriate listing price (or bidding price).
Considered the single most important tool in assessing a home’s market value, the typical CMA comprises around 30 to 50 pages of data, charts, photos, and facts that form the basis of an unbiased opinion of a home’s market value.
But a CMA is more than that. A balance of art and science, it relies on factual data such as square footage, age, and location. However, a well-executed CMA also incorporates subjective characteristics like upgrades, neighborhood, and features.
A real estate agent or broker usually compiles information gathered from the multiple listing service (MLS), photos of the property, inventory levels, and other market indicators. Some agents, like Medford, turn to industry software like Cloud CMA in order to add greater detail to the results.
