Comparative Market Analysis
A home comparative market analysis (CMA) is a report that compares a property's features, such as square footage, number of bedrooms, and bathrooms, to similar properties in the same area. The report also includes information about the current market conditions, such as recent sales prices and the number of homes on the market. The CMA is an important tool for homeowners, potential buyers, and real estate agents, as it provides helpful insights into the local housing market and can be used to determine an appropriate listing or purchase price.
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To create a comparative market analysis (CMA), a realtor follows a step-by-step process. Here is a general outline of the steps involved:
Gather relevant data: The first step is to gather information about the property being evaluated as well as other similar properties[1]. This may include details such as the property size, number of bedrooms and bathrooms, location, recent renovations, and any unique features.
Analyze comparables: Realtors use recent sales of similar properties, also known as comparables or comps, to determine the market value of the subject property. These comparables should be properties that are similar in terms of size, location, age, and features.
Adjust comparables: Comparables may not be identical to the subject property, so adjustments need to be made to account for differences. This could include adjusting for square footage, number of bedrooms and bathrooms, or any other significant variations between the subject property and the comparables[1].
Determine market value: Based on the data gathered and the adjustments made, the realtor calculates the market value of the subject property. This is done by analyzing the adjusted comparables and taking into account current market conditions and trends.
Prepare the report: The CMA report is then compiled, which includes all the data, analysis, and calculations[1]. This report helps sellers set a fair listing price for their homes and provides buyers with information to make competitive offers.
It is important to note that the CMA is an estimate and not an exact science. It should be used as a tool to guide pricing decisions and understand the market value of a property, but it may not reflect the final sale price.
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