What is a Comparative Market Analysis or CMA?!!

So, you have decided to sell your house.  If you have contacted a realtor®, they have most likely prepared a comparative market analysis or CMA for your home. Simply, a CMA is used to tell us how much your home is worth and will sell for in the current real estate market.  A CMA is based on the active, expired, and sold listings in the area that compare to your house.  It is fact based and so when I say “compare to your house” I mean houses which have the same number of bedrooms, same number of bathrooms, approximate square footage, approximate age etcetera and that are located in the same area as your home. Depending on the market, your realtor® will set the CMA to go back a certain length of time.  It could be a couple months or even a year.  In summary, the CMA will show houses (similar to yours) that are for sale, have sold, or have expired in your area in the last couple months (or whatever length of time that your realtor® chooses).

Now that we have the comparable listings, we start looking at the prices.  By looking at the listing prices of the expired listings we can tell that those prices were too high in the current market, and therefore did not sell.  By looking at the sold listings, we know that their listing prices were competitive in the current market and therefore sold.  By looking at the active listings, we can look at what we are up against.

Now, that is not all a CMA is based on.  Many home owners have made improvements such as recent remodels or their home might include something else that may increase its value.  So, how do you know how much this adds to the worth and therefore the listing price of your home?  You rely on the expertise of your realtor®!  Remember, realtors have experience working with buyers and sellers alike.  They know how much most buyers are willing to pay for certain upgrades or renovations.  Depend on them and trust that they know the market best.

At the end of the CMA, there will be a listing price that is recommended by your realtor®.  Now you know, this number is based on facts and experience.  However, the final listing price is determined by you.

If you are thinking about selling your home, I would be happy to provide you a free comparative market evaluation with no strings attached!

Sincerely,

Astra Mulawka
Sales Representative
Better Homes and Gardens
Real Estate Signature Service