If you’re considering selling your home, you’ve likely started researching how much you think it would sell for. Although a great jumping-off point, online estimation tools don’t take every necessary aspect into consideration — that’s where a comparative market analysis comes in. A licensed professional will often conduct a CMA in real estate sales to help inform your financial decisions.
The home selling and buying process can be confusing, making it difficult for first-time and even previous buyers and sellers to keep track of the real estate market as it changes. Your local real estate agent or broker will be better equipped to create an in-depth analysis with their expertise in the area and access to tools like regional MLS (multiple listing service) websites.
Learn more about everything that a professional CMA in real estate entails here.
What Is a CMA and Why Is It Important?
A CMA in real estate is a formal analysis from a licensed REALTOR® that estimates the value of your home by comparing it to similar properties that have recently sold in your area. A CMA report is usually used to help homeowners decide on a listing price when putting a house on the market. It can also be used on the buying side of the equation to help buyers decide what is a competitive offer on a home in a specific area.
It’s important to have an accurate idea of what your home is worth before listing so you can make improvements if necessary, know whether or not now is the right time to list your house, and set your budget for a new home accordingly. If you overvalue or undervalue your home, then you won’t have a clear idea of how to maximize the benefits of your home sale and how much your budget can get you in a given area.
How Can You Get a CMA?
You can get a rough, starting estimate of the value of your home by using online calculators or tools. However, in order to get an accurate estimation, you’ll need a comprehensive analysis using complete sales data and deep real estate market knowledge both locally and nationally. For this reason, it’s best to partner with a licensed REALTOR® in the local area you’re looking to buy or sell in to conduct a CMA.
Note that a CMA is an informal version of an appraisal, so real estate agents are not required to have an appraiser’s license to perform one. For this reason, it’s essential to partner with a deeply experienced and well-established real estate agent or broker who knows the area well — and one that you know you can trust to provide honest, quality-driven service.
What Should a CMA in Real Estate Include?
A professional CMA report will include several items to help give you a comprehensive idea of what your house could sell for or what a competitive offer on a certain home might be, including the following:
- Street address of the subject home — This will be your current home if you’re the seller, and the home you’re considering purchasing if you’re the buyer.
- Three to five comparable homes — These will be homes preferably in your exact neighborhood or a comparable nearby one, with a similar amount of space, features, and of a similar age (or with a similarly timed renovation) as your home that have sold recently. We’ll take a deeper dive into how real estate agents choose comparables in the next section.
- Square footage of your home and comparables — The amount of livable space, number of bedrooms and bathrooms, and outdoor space will all be compared in the CMA report.
- Sales price of comps — Each comparable original sales price will be listed, with adjustments noted to take into account any variations in the terms of sale, and the resulting adjusted sales price per square foot will also appear on the CMA report.
- Fair market value of the subject home — The fair market value (FVM) is the price that your home (or the home you want to buy) would sell for on the open market under a set of accepted normal conditions.
How Does a Real Estate Agent Choose Comparable Properties for a CMA?
Creating a comparative market analysis is a complex process but, generally, a real estate agent will consider the following parts of your home against others to find comparables:
- Location — Your real estate agent will try to find three to five comps within your neighborhood, or within nearby neighborhoods that are similar to yours if necessary.
- Space — The square footage of the home and the size of the property are both essential in any home valuation. The number of bedrooms and bathrooms will also be a huge factor in determining which recently sold houses are good comps.
- Age — How old your property is as well as how recently elements of it have been updated or renovated and how well it’s been maintained will all play an important role in identifying comparable homes.
- Special Features — Depending on your area, certain additional features may add value to your home. Examples include decks, pools, fireplaces, garages, and finished basements.
- Sale Date and Details — Your real estate agent will choose comparable houses similar to yours that have been purchased in the past three to six months; otherwise, the home prices will need to be adjusted based on market changes since the sale. The terms of the sale, like what financing a home buyer used, seller concessions, and other details will also need to be taken into consideration in order to get an accurate valuation.
Work With a Real Estate Agent You Can Trust to Deliver an Accurate CMA
A real estate agent can help you determine the current resale value of your home and advise you on how to maximize it before selling, as well as the value of homes you may be considering buying to take the guesswork out of deciding on offer amounts. You’ll want to make sure you’re working with an experienced, trustworthy partner who knows the area and market well to help you make important financial decisions in the sale or purchase of your home and avoid being taken advantage of by the other party in the sale.
Whether you’re thinking about buying or selling, CENTURY21 Bolte Real Estate has been the trusted North Central Ohio partner for all of your home needs since 1936. Contact us today to discuss your home buying or selling needs and request a comprehensive, professional CMA.