What is a Comparative Market Analysis (CMA) in Real Estate?
What does the term CMA stand for in real estate? If you are looking to sell your home, you have likely heard this acronym, but what does it mean?
Well, I’m here to tell you, it’s far more than just entertainment. The CMA is the most important component of your pricing strategy when listing your home for sale.
Let’s start with the basics…what does CMA stand for?
CMA stands for Comparative Market Analysis.
A comparative market analysis is an analysis that a real estate agent will put together to give you a price opinion on your home.
You may ask, how does a real estate agent conduct a CMA? Well, they may begin the process by looking at the recent sales of homes very similar to yours to help determine where your home might be priced.
If you have a 3 bedroom, 2 bathroom home, your REALTOR® is going to look at other 3 bedroom, 2 bathroom homes with similar square footage in the same neighborhood that have recently sold.
Your REALTOR® will give you a report of these homes, including price per square footage, pictures, and trend lines that will give you a pretty good idea of what your home should be listed for.
A CMA greatly affects the list price of a home because the recent numbers and statistics are strong indicators of what we can expect your house to sell for! If you try to list your home way above the price of similar homes that have just sold in your neighborhood, you’re only setting yourself up for frustration and discouragement when your home sits on the market for months.
What is the difference between a comparative market analysis and a home appraisal?
If you are selling your home, you may wonder what the difference is between a CMA and a home appraisal. A comparative market analysis (CMA) is a report prepared by a real estate agent that compares a property to similar properties recently sold in the same area. The report includes the property's size, condition, features, and recent sale prices. It is typically used to help a property owner determine a fair price to sell their home.
On the other hand, a home appraisal is a report prepared by a professional appraiser that estimates the value of a property. The appraiser will inspect the property and consider factors such as size, condition, location, and recent sales of similar properties in the area. When a borrower applies for a mortgage, home appraisals are usually required by lending institutions, and the value determined by the appraiser is used to determine the loan amount.
In summary, a CMA is done by a realtor to help determine a fair price to list a property. An experienced appraiser does an appraisal to estimate the property's value and is usually required by lending institutions when a borrower applies for a mortgage.
Do yourself a favor and trust the expert, your REALTOR®, to run the numbers for you and give the best advice on what price you should list your home for.
Now that you know what a CMA is, you’re better equipped to sell your home and know that the list price is right! If you have any additional questions about CMA’s or how they are performed, feel free to reach out!
As always, if we can help you move in, move out, move up, or move on, let us know. Anchor Real Estate is here to help!
If you aren’t a REALTOR® or have some experience in real estate, chances are, a CMA is just the Country Music Awards we used to all watch back when we had cable.
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