What is a CMA and why do I need it?  I already know what my home is worth!  When you want to sell your home, coming up with the selling price is not that easy.  What you list your home for and what buyers will pay for your home can be very different.  Pricing your home accurately will yield more showings, more interested parties and ultimately, get your home sold.  Unfortunately understanding what you home is worth is not as easy as determining what your car is worth.  For your car, there are many resources to tap into, the Blue Book, online used car sites, and newspapers to name just a few.  When determining what your home is worth, a CMA is your answer.  CMA is a comparative market analysis and is usually prepared by a knowledgeable realtor in the area.  It is an in-depth home analysis of a home’s worth in today’s market.

Realtor Resources

Realtors have resources available to prepare a market analysis in a report format for you.  The analysis ideally will look at comparable homes in the area that have sold over the past 6 months.  Realizing that not every home is exactly alike, determining homes to include in the analysis can sometimes be challenging.  Ideally, the analysis will include the most recent homes that have sold within a 1/4 to 1/2 mile radius, have the same number of bedrooms and bathrooms, within 100-200 square feet, garage size, lot size, and same number of stories (please don’t compare single level homes to 2-3 level homes ;-/).  The analysis should also include 6-10 homes to compare to provide the most accurate price range.  Additionally, the comparable homes should be of like condition.  Are the kitchens updated? Is there a pool? Is the flooring of like material and are the homes built around the same time?

Just Sold or Actives?

Should active listings be included?  Active listing don’t provide an accurate representation of price in the market.  The market is determined by the price that sellers and buyers agree on.   An active listing only gives one side of the equation.  Also, a home that has been on the market for more than 60 days is more than likely over priced because a buyer has not snatched it up as of yet.  The best approach is only to include sold listings and not include active, cancelled or expired listings because they are missing one of the main factors of determining the market; buyers.

Keep in mind a CMA is not an appraisal.  An appraisal is specifically a determination of value so that the lender knows the condition to make an educated decision on lending.  It is a big part of the loan underwriting process.

If you would like a comparative market analysis (CMA) of your home, at no charge, please contact us and we would be happy to get that to you!