A comparative market analysis (CMA) is an evaluation tool used by real estate agent’s, based on local listing and sales data, to determine the probable sale price of a property in the current market.
Who can use this information?
Both sellers and buyers alike.
Home sellers can use a CMA to help determine a list price.
Buyers can use it to help them determine the offer price on a property they want to buy.
How accurate is this analysis?
Depending on the quality of the data; the listings used for comparison should ideally be located in the neighborhood, and they should be as similar as possible to the subject property.
Comparative elements:
- Property Type (condo, two storey houses, split level,etc);
- Numbers of rooms;
- Size of the living area and/or building size;
- Year built;
- Garage or parking spaces;
- Basement: finished, semi-finished or unfinished;
- Other similar features such as: fireplaces, inground pool, air conditioning, etc.
To determine the probable sale price of a property, the CMA will use the recent sales from the last 6 months. If the current market is changing rapidly, six months may be too long a time frame, in this case, 3 to 4 month sales records will be used as a reference.
The CMA should also include information about currently available comparable listings, as well as information about properties that did not sell during their listing period. These are called expired listings.
For sellers, active listings would be your competition once your home is on the market. How you price your property relative to the competition is critical to your home-selling success.
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Because of the constant changes in real estate market conditions, more sellers are competing for fewer buyers. And most buyers are not jumping at the first property they fall in love with.
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