From a home buyer or seller’s perspective, determining how much a house is worth can seem subjective, especially given how many factors go into it. However, pricing a property is a science. An important tool used by Real Estate Agents is a Comparative Market Analysis (CMA). It helps to determine the approximate value of a home. So, what is a CMA and how exactly does it work? Well, we’re here to answer that!
What is a CMA?
While there are a handful of methods Real Estate Agents use to determine the value of a home, the most common method is the CMA. This is a sales comparison approach that agents use to estimate your home’s market value. It is an in-depth evaluation of “comparable homes” (meaning similar homes of equal desirability) sold in the same area, within the past 3-6 months.
A good agent will take into account the features of a home and the local area and neighborhood. Considerations for comps (or comparable homes) include:
How Does a CMA Work?
Typically, your agent will select at least three comps in the area, which they will analyze to determine how they differ from the subject property. Once these differences are itemized and priced out, the sales price of the subject property is adjusted to reflect a current market value. Although the CMA method ISN’T a crystal ball that determines what a home will sell for, it gives an accurate price range that the property fits within.
How a CMA Helps Buyers
Choosing the correct list price is important for attracting interested buyers. After all, when a property goes on the market, it’s competing with other available homes in that price range. If a home listing is too high, buyers will likely pass it over in favor of other properties.
However, if priced correctly, buyers will be more inclined to view the listing. This likely will be because they feel they’re getting enough for their money. This is why a proper CMA is so important. Ultimately, the more showings a property has, the better!
If you have any questions about a CMA, or the home buying and selling process, please text or call us at 253-537-HOME!