The Comparative Market Analysis (CMA) is a method used by real estate agents to establish the market value of a home or commercial property. The CMA consists of evaluation of market and other economic variables to determine listing price.
Distinct from original mortgage loan appraisal of a property, the CMA combines a number of factors not restricted by market rates. When a real estate agent performs a CMA analysis, presentation of a property value is based on comparison of local listings. Types of listings involved in CMA reporting: active, pending, sold and expired.
The CMA report offers potential buyers and lenders a recommended selling price range. The pricing continuum accounts for some deviation from the estimated price and it is of utmost importance that you pay close attention to this report since it can largely determine how your selling process continues.
How the CMA is Prepared
Agent preparation of the CMA requires evaluation of information from the Multiple Listing System (MLS), as well as county records of property title. Comparison of square footage, amenities and upgrades, age, and location are all included in the estimated list price. Location has a significant effect on total price. Listing prices of adjacent and nearby properties establishes a baseline for estimated CMA final price.
The property price comparison is comprised of three or more properties located in the same neighborhood as the CMA property. Some agents run a cross-comparison of up to six properties to evidence a more reliable pricing structure. If a comparable property is not available in the neighborhood, other similar properties throughout a city may be sourced for the listing estimate.
Selecting a Real Estate Agent
Many property owners select a real estate agent based on CMA reporting. When a homeowner or commercial property owner initiates resale of a property, request of CMA from multiple agents is common in order to make a point of contact and decide which agent you feel most comfortable pursuing your sale with. If an agent exhibits expertise in the area of CMA and the area where your property is located, they should definitely be considered. The CMA reflects an agent’s knowledge of the real estate market, valuation in the area, and pricing criteria to obtaining the best possible price on a listing. Experienced agents will report CMA value close to market appraisal.
CMA Benefits for Property Owners
The CMA offers potential buyers comparative listings in a neighborhoods of interest. Reasonably priced listings are the most likely to sell quickly. The CMA on a home or property provides prospective buyers with a good idea of the value for money on a real estate investment, including resale return on investment according to current market values.
If you are seeking refinancing or selling a property in Ann Arbor, MI, an unbiased opinion of a property’s value can serve as leverage in sourcing a better interest rate and payment arrangement on an existing title. If the results to a CMA are good, it is time to put a property up for sale since now really is the time to sell in Ann Arbor.
If you have any further questions about selling your home, or the market in and around Ann Arbor, please don’t hesitate to contact us.