Comparative Market Analysis (CMA)

A Comparative Market Analysis (CMA) is a comprehensive evaluation conducted by real estate professionals to determine the current market value of a property, such as a single family home or a condo. It involves analyzing similar properties that have recently sold or are currently on the market in the same geographical area.

The purpose of a Comparative Market Analysis (CMA) is to provide sellers, buyers, and real estate agents with objective data and insights to make informed decisions regarding the value of property.

By examining comparable homes, the Comparative Market Analysis (CMA) assesses the property's value based on factors such as size, location, amenities, condition, and recent market trends.

To begin the process, a real estate professional collects data about the subject property, including its square footage, number of bedrooms and bathrooms, and any other unique characteristics that may influence value such as views, location, and more. The next step involves identifying and reviewing comparable properties that share similar characteristics. These comparables — also known as "comps" — are usually selected based on factors such as proximity, property type, size, and market conditions. The goal is to identify properties that have recently sold or are actively on the market, which closely resemble the subject property.

Once the relevant comps have been identified, a thorough analysis takes place, which includes comparing the subject property's features, condition, and location with those of the comps. This includes evaluating any differences and adjustments necessary to reflect the subject property's value accurately. Adjustments are made to account for variations in square footage, amenities, renovations, or other distinguishing factors.

The Comparative Market Analysis (CMA) typically includes a summary of the comparable properties, including their list price, sale price, days on the market, and price per square foot. It may also include graphs and charts to visually represent the market trends and provide a clear understanding of the property's position compared to the identified comps.

The results of the Comparative Market Analysis (CMA) serve as a valuable tool to help sellers determine their property's appropriate listing price, as well as buyers to make informed offers based on market conditions. Additionally, real estate professionals can utilize a Comparative Market Analysis (CMA) to effectively market properties and negotiate with potential buyers or sellers.

Overall, a Comparative Market Analysis (CMA) provides an insightful assessment of a property's current market value by examining recent sales and active listings. Its impartial data-driven approach is critical in assisting all parties involved in a real estate transaction to make confident and informed decisions.