A home’s value is probably your first concern when you set foot in the market to sell or purchase a property. It is important to be well aware of the property’s value to set an appropriate price.
To do so, one can take help from the numerous property valuation techniques. However, we would suggest the most popular method of all, i.e., Comparative Market Analysis (CMA).
Whether you are looking forward to selling your property or purchasing one, it is imperative to understand CMA.
What is Comparative Market Analysis?
Comparative Market Analysis, or CMA, refers to a critical examination of the selling prices of similar real estate properties sold within the area or vicinity. Typically, CMA is somewhat similar to an appraisal. However, it is not as formal or professional.
Real estate agents conduct a CMA, in which they help their clientele determine a price list if they are planning to put up their properties on sale. Similarly, they assist in determining the price to be offered when it comes to purchasing a property.
Considering that no two properties can be the same, the CMA must have room to make relevant adjustments. This is to ensure that a fair and accurate sale or offer price can be agreed upon.
Why is getting CMA suitable from an agent than from an online algorithm?
You will come across that most real estate agents are willing to conduct a CMA free of charge. This probability doubles when you are planning to sell your property.
Speaking of this, comparing CMAs can give you a concrete insight into an agent’s professionalism.
Therefore, it is strongly recommended to conduct one-on-one interview sessions with an agent to find if you get along..
It is natural for you to feel the need to carry out your own analysis besides getting a professional CMA from a real estate agent. While you can do so through home value calculators online, it is not wise to rely on them.
Why is that so?
While there is no denying that these online calculating tools can be a good start, the results are still merely the tip of an iceberg. Just like any other automated tool, these cannot consider factors that a human eye could. They can be a good starting point, and your agent’s results will be a point to probe further.
What does CMA include?
Essentially, a thorough CMA includes the following
– A detailed assessment of the neighborhood
– Estimated property values, and
– Calculation of the average price per square footage for recently sold properties.
A CMA will turn out to be effective only if it has taken into account similar properties like yours. This is to ensure a close outcome to enjoy an apples-to-apples comparison.
Furthermore, your CMA must analyze sales from recent times. Ideally, it is recommended that you don’t consider sales carried out before the last six months.