So the first thing that we should uncover is What is CMA In Real Estate (comparative market analysis) and What are the benefits.
- What is a CMA in Real Estate?
- What Does A CMA Look Like
- What are the benefits of a CMA
- How To Do A CMA (Comparative Market Analysis)
What is a CMA in Real Estate?
A CMA stands for comparative market analysis. The purpose of the comparative market analysis is to assess properties of liking kind nature in like in kind areas within relevant proximity.
There are three main things that are looked at in a comparative market analysis. As a side note, you want to know that comparables are often referred to by real estate advisers as comps.
So when you hear the word comps it means the property that’s liking kind to the property you’re making an offer on.
So when you find the right one the comps are gonna be looked at and put most scrutiny on are gonna be the ones in the closest proximity to the house that you want to buy.
They’ll be a relevant size and about the same size age and condition as the property that you wish to purchase.
It’ll be the most recent sales history from let’s say the last three to six months.
Generally, as a rule of thumb, the comparables of the most recent three months provide the trend in the benchmark moving forward.
What Does A CMA Look Like
So what does the CMA exactly look like and what are the variables and the information that is going to be assessed and broken down on the comparative market analysis.
So there are 6 main things that are gonna be pretty standard pretty typical across the United States with real estate advisors.
The Address Of The Compared Properties
- The first thing that you’re gonna notice is the address of each property being compared.
The Date That Property Sold
- The second thing that you’re gonna have is the date that property sold.
Days From Market To Offer
- The third thing is how many days was a non-market before it received an offer went into contract.
Original Listing Price
- The fourth thing is the original listing price or the asking price at the time that property went into contract.
Number of Bedrooms and Bathrooms
- The fifth thing is the number of bedrooms and bathrooms in the house.
Number of garages
- The sixth thing is how many garages does it have if any.
What are the benefits of a CMA
The benefits of the comparative market analysis are pretty simple and they’re pretty straightforward I mean let’s face it.
If you were thinking you wanted to offer four hundred and seventy-five thousand dollars for that five hundred thousand dollar home.
You would now know that is a very lowball offer in relationship with the comparable statistics show and it’s more than likely not going to be accepted.
While everything is negotiable finding the facts out front will be massively beneficial to you moving down the road.
At the same time let’s say that home is listed for five hundred thousand dollars after reviewing the comparative market analysis.
It looks like that home should be selling for $475,000 and you should probably make your offer before $475,000.
How To Do A CMA (Comparative Market Analysis)
So before you list the property and meet a client that’s looking to sell.
You do a CMA and some proper research so that you could properly advise the client on where the market is and where you think that you should be priced to get the ultimate goal of selling the property.
You will do some preliminary checks, discussion with any upgrades that they’ve done in the property anything that would negatively affect the home or positively affect the home.
So you can see who’s who owns the property, any registrations against the title if they’ve got second mortgages.
Get a basic idea of maybe what they paid for it and what they owe on it I think that’s very important.