What are CMAs?

Selling or buying any property, whether through full service brokers or limited service brokers, whether the property is short sale, REO, or regular market, a CMA can be a valuable tool. Just what are they, and how can they help you in your real estate transactions?

CMA stands for Comparative Market Analysis. This is a process completed by a real estate agent in order to determine the true value of your home. It's detailed and takes into account a lot of information.

Preparation of a CMA

The first step in creating a CMA involves an agent doing a walk-through of your home. He or she will be looking at factors such as how many rooms you have, when the home was built, what is up to date, and what needs fixing.

At this point, the agent may suggest you make some changes to your home in order to increase its value. They will tell you the strong selling points they see (location, street, etc.). You should let the agent know about any other improvements you are planning to make on the home, so they can factor that into the complete CMA.

After evaluating the home, an agent will return to the office and engage in research on information on similar (or Comparable) properties that have sold in your area. They use the MLS to do this. They will look at houses which have sold in the area in the past year, houses which are currently on the market, listings that have expired, and sales which are in the closing stages.

All of this information will be put together to allow the agent to suggest a price range for your home. Price ranges help account for variance in home sizes, conditions, and the current market.

The Advantages of a CMA

For a seller, a CMA is important because it give a realistic mark for a listing price. It can also give a seller a good idea about just how much their house will actually sell for.

A buyer can use a CMA as well, as long as they take advantage of a buyer's agent. A CMA completed for the buyer will allow her to see the value range of a home she's looking at to determine if the seller is asking fair value, and to create an appropriate offer.