What is a CMA?
A comparative market analysis, or CMA, is a detailed report prepared by a real estate agent that estimates a home’s current market value based on a comparison of similar properties (often referred to as “comps”). CMAs are very useful for when you’re looking to sell or buy a home, or even if you’re just curious about your home’s value.
Typically, your real estate agent will perform a CMA to help determine a fair value for your home. A CMA can include:
- Details about the subject property
- Comparable recently sold homes in your area
- Home in your area that are for sale (your competition)
- Homes that did not sell (expired, terminated, suspended listings)
The Subject Property
Before doing a CMA, your agent has to look at your home. The agent will take in factors such as number of beds/baths, square footage, location, acreage, and any other notable features (for example, if your home is a waterfront property). After assessing the home, they will be able to run a comparative market analysis for similar homes that have sold within a recent time frame, typically in the last 6 months.
Sold Homes
Similar homes that sold within the specified time frame will appear on the CMA. This section should outline how much they sold for and when, as well as the home’s details.
Homes for Sale
The homes that are for sale in your area are your competition. When pricing a home, you typically don’t want to go much higher or lower than the comparable homes in the area.
Expired, Terminated, or Suspended Listings
There are a variety of reasons a home may not sell–perhaps it was priced incorrectly, or maybe it has unique features that appeal to specific buyers. Whatever the reason, analyzing the comparable homes that didn’t sell can give some insight into current market trends.
CMA vs Appraisal
A CMA and a home appraisal are similar reports that can help determine a home’s value, though they serve slightly different purposes.
Typically, a CMA will be provided by your real estate agent when you’re in the early stages of preparing your home for sale. This report will evaluate a specific market’s current state and conditions and examine data in order to understand the trends, factors influencing supply, demand, dynamics, and pricing within a particular market segment.
A home appraisal is a report done by a licensed or certified appraiser that determines the value of a property based on various factors. The appraiser will consider the property’s current condition, age, location, renovations that have been done, neighbourhood factors, and more. A home appraisal is often done before securing a mortgage or refinancing and typically costs anywhere from $300-$500.
A comparative market analysis is a great tool for not only assisting you in pricing your home, it can provide useful insight on the current market trends. By ensuring you’re well priced when entering the market, you can avoid having your home sit for too long and losing momentum.
