What is a CMA, Comparable Market Analysis?
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The most common method of determining a price for a house is the Comparable Market Analysis (CMA).
A CMA will show exactly what properties that are similar to your house have sold for within a recent
time frame. These analyses are based on fact, rather than opinion, and that information will always
be of more value to you. Generally, CMAs will list houses in a particular location that are currently
on the market, have sales pending on them, have expired from the market, and have sold. Be forewarned:
it is primarily the SOLD properties that you need to be concerned with. What houses are listed for
on the market is not always a good indication of what their value is, those that have pending sales
will only tell you what the listing price is (not what it is going to sell for), and those that have
expired because they haven't sold may indicate that they didn't move because they were overpriced.
If you are in the process of choosing an Agent, they should, as part of their listing presentation,
develop and share a CMA with you. In addition, if the Agent is familiar with your neighborhood, they
may be able to add some insight beyond just the numbers on the CMA sheet. For example, the CMA may
show that the average sold price in the last year for houses similar to yours is $130,000, but the
average of the houses sold in the last 2 months is $134,000, indicating an increase in market value.
If you are planning to sell your house on your own, many Agents will generate a CMA for you so you will
have access to the same information. The hope, on the Agent's part, is that you will tire of your
attempt to sell the house yourself (as many self-sellers do) and consider their services when it comes
time to list. For most states in the U.S. you can also access information online, which can deliver
information (address, sold price and date, square footage and more) for up to 30 comparable properties.
The CMA will most likely give you some general information about the houses that will be compared: Number of
bedrooms and baths, square footage, the listing price and the sold price. It is important that the CMA
focuses on houses similar to yours. If your house is a 4 bedroom, 2 1/2 bath 2 story, a CMA that lists
only 3 bedroom 1 bath homes is of little or no value. Likewise, a CMA that includes a number of
properties from a neighborhood 2 miles away will have limited value. To have a good CMA you must have
all of the similar sales in the neighborhood in the last year. Obviously, the fresher the data (the
more houses sold in the last few months), the better the CMA.
In the following example, "your" house--the subject property--is 1292 Washington, marked with an "S"
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CMA Example
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COMPARABLE MARKET ANALYSIS
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Address
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Bedrooms
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Baths
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Square Ft.
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Garage
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List Price
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Sold Price
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DATE
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S
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1292 Washington
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4
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2
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1804
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Y
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TBD
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N/A
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N/A
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1
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1255 Washington
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4
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2
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1788
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N
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$147,500
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$145,000
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1/03/06
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2
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1146 Washington
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4
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2
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1896
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Y
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$152,900
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$152,000
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11/15/05
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3
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744 Jefferson
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4
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2 1/2
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1912
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N
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$149,950
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$149,950
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10/5/05
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4
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912 Jefferson
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4
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2
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1692
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N
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$145,000
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$142,750
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1/12/06
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5
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6602 Adams
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4
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2
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1692
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N
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$154,000
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$152,000
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10/1/05
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Average List Price:
$149,870
Average Sold Price:
$148,340
Average Sq.Ft:
1796
Average Sold per Sq. Ft:
$82.59
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