If you’re considering selling your house, you might have come across the term Comparative Market Analysis (or its abbreviation CMA). But what is a CMA? Do you need one to sell a house? How much do they cost? And where do you get one?
Here’s everything you need to know about CMAs.
What is a CMA?
A CMA is a tool used to value real estate. When you’re selling your house, the CMA helps you price your home correctly so that it generates interest from buyers. If you price too low, you could be leaving money on the table, but if you price too high, buyers and their agents might ignore your listing.
Buyers also use CMAs. Before making an offer on a home, the buyers’ agent will complete a CMA to make sure their offer price is fair. It’s necessary for buyers to have their agents complete a CMA because there is no guarantee that the list price reflects fair market value. And even if the list price was fair on the day the home hit the market, values can change quickly in fast markets.
How Do CMAs Work?
CMAs determine the value of a home by comparing sales prices of similar homes that sold recently. For example, if your neighbor’s house is similar to your house, and it sold last week for $990,000, the value of your home might be around the same price point.
The tricky thing is that all real estate is unique. Even in a subdivision of cookie-cutter homes, one home might be near a noisy street, while another might be near a peaceful nature preserve. So the CMA needs to account for all the factors that are relevant in deciding on home values, including:
Location,
Size,
Age,
Lot size,
Amenities,
Views, and
Condition.
For your CMA, you want to find comparable properties that are as similar as possible to your house and sold as recently as possible. Then, you need to adjust the sale prices of those comps to see what they would have sold for if they had been identical to your house.
This process is an art and a science. To get it right, you need to know how much value an extra bedroom or a pool adds to a property in your market. You need to know how much more today’s local buyers will pay for a good view or a quiet street.
Most sellers simply don’t have enough information or experience in the local real estate market to be able to do this themselves. And that’s why you need a real estate expert to complete your CMA.
Do I Need a CMA to Sell My House?
A CMA is the best way to quickly find the fair market value of your home. If you want to price your home correctly when you put it on the market, you need a CMA.
Is a CMA the Same as an Appraisal?
CMAs and appraisals are very similar. They use the same process to arrive at the fair market value of your house. The difference is that a CMA can be completed by any real estate expert, while an appraisal must be completed by a licensed real estate appraiser. Appraisals are most often used to confirm the value for the buyer’s lender. Before the lender will fund the buyer’s loan, they need to make sure the property is worth the amount the buyer is paying since the property is used as collateral for the loan.
Where Do I Get a CMA and How Much Do They Cost?
To get a CMA, simply contact the real estate experts here at Sequoia Real Estate. We provide professional CMAs, completely free of charge, to any local homeowners considering selling. Because we believe you should have accurate information before making your decision to sell.
Contact us today to request your free CMA. One of our friendly, professional listing agents will collect your property details and get to work finding comps and adjusting their sales prices to show you how much your house is really worth in today’s local market.