A Comparative Market Analysis (CMA) is one of the most valuable tools in the world of real estate. Why? It offers an in-depth look at the comparable homes in the area that have recently sold allowing you to properly estimate the value of a home.
Real estate agents should use a CMA to provide their clients with an accurate estimation of their home’s value. Knowing how to complete a CMA correctly is an important key to any real estate agent’s success!
CMA vs. Appraisal
A CMA is very different from an appraisal in that an appraisal is conducted by a licensed appraiser whereas a CMA can be done by any real estate agent. Also, an appraisal isn’t performed until contracts are signed and a CMA is completed before listing a home to help determine its value.
Which factors are included in a CMA?
To complete a CMA accurately, there are a number of factors that need to be determined. All of these factors will be compared to recently sold homes in the area to calculate the home’s value.
- Square footage – The square footage of a home largely determines the price. A CMA should compare a home to others homes in the area within 200 to 300 square feet.
- Number of rooms – When comparing a home to others, the number of rooms will also greatly affect the sale price. Adding an extra room to your house will make it stand out against the competition.
- Style – The style and construction of your home will also be factored in when determining the value. This can be anything from the layout of the home to the curb appeal.
- Age – Another important factor when computing a home’s value is the age of the home.
How can a CMA help you sell a home?
The main purpose of a CMA is to provide the seller with an educated estimate of their home. This helps all parties involved when it comes to selling at the best price!
If you’re a real estate agent and are having trouble selling houses for your clients, try spending more time when creating a CMA. If you’re not completing CMAs for your clients, you need to be.