No two homes are identical, which is why choosing a sales price or offer price for a home can be challenging. That’s where the comparable market analysis, or CMA, can be useful. You can use the power of trends in your local market to discover what the best sale price or offer is when buying or selling.
What is a CMA
The CMA is a side-by-side comparison of homes for sale and homes that have recently sold in the same neighborhood and price range. This information is further sorted by data fields such as single-family or condo, number of bedrooms, number of baths, zip codes, and many other factors. Its purpose is to show fair market value, based on what other buyers and sellers have determined through past sales, pending sales and homes recently put on the market.
Creating a CMA
Your real estate agent’s multiple listing service (MLS) is a computer program that can provide you with a CMA. The MLS is available to licensed members only, including brokers, salespeople, and appraisers, who pay dues to gain access to the service’s public and proprietary data, including tax roll information, sold transactions, and listings input by all cooperating MLS members.
Listing agents generate CMAs for their sellers, and buyer’s agents create them for their buyers. They both know what current market conditions are for the homes they’re interested in comparing.
CMA Accuracy
The CMA is a here-and-now snapshot of the market, based on the most recent data available, but it can instantly be rendered obsolete by a new listing, or a change of status in a home with the same criteria. Why? The market is constantly changing – new listings, pending sales, closed sales, price reductions, and expired listings.
CMAs can vary widely, depending on the knowledge and skill of the person inputting the search parameters to the software as well as the number and type of data fields that are chosen. The CMA may not include some features.
As informative as the CMA is, it should only be used as a tool and should not substitute for your real estate professional’s knowledge and advice. Professionals have experience to support their ideas and advice. That experience can not be made up in a CMA. However, a CMA is a great way to get an idea of what to expect.
The goal is to give buyers and sellers an idea as to what they can expect when buying or selling. CMAs can be pretty accurate which is why most consider it to provide people with a ballpark estimate. The professional you choose can help you get to home plate.
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