Selling A Home? Know What A Comparative Market Analysis Is?
The real estate business is littered with big and sometimes incomprehensible terms! For example, when selling a home, chances are that you’ll be advised to do CMA.
A CM-what you say? In the world of real estate, a CMA is not a certified management accountant but a Comparative Market Analysis. A CMA is an analysis of your home in order to establish its market value. Or, in layman’s terms, it’ll tell you the approximate value of your property if you're thinking of selling.
A comparative market analysis can range from a short document made up of a couple of pages listing comparable home sales to a full-scale comprehensive report consisting of over 50 pages! Needless to say, if you’re thinking of selling a home, a detailed report will give you a more exact idea of what you can expect to get.
What Information Is Used To Put Together A CMA For Someone Selling A Home?
A CMA will generally be drawn from 5 factors:
1) Active Listings: homes that are currently for sale. The list prices of these homes aren’t really indicative regarding market value, though, because buyers can ask for whatever they want.
2) Pending Listings: these are homes that are under contract but the sale hasn’t gone through yet. Therefore, they are no longer active but chances are slim that you’ll get any information about what price they sold for until the paperwork is through.
3) Sold Listings: these are houses that have sold within the last 6 months and are your true comparable sales, when selling a home. If a potential buyer has your home appraised, these are the sales a home appraiser will be looking at.
4) Off-Market, Withdrawn or Cancelled Listings: these are homes that were taken off the market for a variety of reasons. A couple of examples would be the DOM (days on market) being too long or a case of seller’s remorse.
5) Expired Listings: these are homes, which simply haven’t sold, probably due to an unreasonably high asking price.
If you’re thinking of selling a home and have done a CMA, pay close attention to the comparable sales from the Sold Listings category and look for homes that are most similar to yours in terms of size, age, amenities and location. Also keep in mind that a CMA is an analysis; it is not the same thing as a home appraisal!
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