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Knowing the value of your home is incredibly important as a seller. You want to be certain you get the best price.
One of the most powerful tools for determining your home’s value is called a comparative market analysis, or CMA, which is a comprehensive report that uses a plethora of data to compare your home to similar properties nearby. If you are wondering, “How do I get a comparative market analysis?” or “How much will it cost?” you’ve come to the right post.
Before we get started, something to be aware of is that a comparative market analysis is different from an appraisal of your home. Top real estate agent Allen Studebaker in the Phoenix, Arizona market, says it’s important to know the difference and how to get a CMA done for your home.
What is a comparative market analysis (CMA)?
A CMA is used to compare your property against recently sold properties nearby to determine a beginning listing price for your home sale. A well-done CMA will consider the features of the comparable properties (called comps), such as square footage, age of the home, location, upgrades, nearby amenities, and other data.
A top listing agent will use this information to create an opinion of the home’s value on the market. The CMA report can be extremely detailed, with charts, graphs, photos, and other information laid out in an easy-to-read format.
The result is not a hard and fast number, but rather, it should be used as a gauge. Studebaker says creating a CMA is more of an art than an exact science.
How is a comparative market analysis put together?
An agent has a lot more tools at their disposal to create a CMA than the average person, which is why trusting this task to a professional is the best option for home sellers. Real estate agents have access to the industry’s multiple listing service (MLS), unlisted properties, tax records, and real-time data. Agents can find far more accurate information compared to what might be posted on public domain listing sites.
“Not all properties get recorded properly through the MLS and get syndicated to other websites,” says Studebaker. “In these cases, it could have dramatic results on a CMA that someone is doing off of other websites that don’t actually have all the data delivered to them.”
The real estate professional will take data from a wide range of sources to put together a comprehensive CMA with real-time information.
What makes up a good comparative market analysis?
These components and more make up a complete CMA to assess the most accurate price point for the home in the current timeframe, including:
- Date of sale
- Lot size and number of stories
- Number of bedrooms and bathrooms
- Square footage of the comp home
- Age and condition of property
- Special features, like landscaping, parking, foundation, new HVAC, garage, finished basement, fencing, etc.
- Extra features or upgrades like hardscaping, accessibility, curb appeal, pool or hot tub, security system, upgraded finishes like marble, etc.
- Terms of the sale and financing
- Interior photos of comparable sales
- Amenities such as a neighborhood pool, HOA fees, gated community
Studebaker stresses that knowledge of the area is very important for the person who is creating the CMA because of factors that go into creating it that may not be apparent from a photo.
“A house could be on a busy road, or on a golf course, and if you put those two into an analysis together, you’re going to have a very, very different result because golf course homes sell for more money than homes that are against busy roads, freeways, or something of that nature,” he explains.
“Someone with boots on the ground can also do a micro analysis of what your home is worth based on the fit and finishes inside of your home, as well as the outside condition and how it compares with other properties in the neighborhood,” says Studebaker.
In the current shifting market, this kind of first-hand analysis can provide crucial information to a seller facing big decisions.
How do I get a comparative market analysis?
For the most part, a CMA is not needed unless you are getting ready to sell a home, in which case, you will already be engaging with a real estate professional in your area. When you are working with a top agent already, they often provide CMAs as part of their service to the home seller since a CMA is an indispensable tool in determining a fitting listing price for the home.
How much does a comparative market analysis cost?
Some agents charge $100 to $200 for a CMA, but others provide them free to clients who will be using their services to sell their homes. Many agents advertise free CMAs as part of their marketing and will even include CMAs when they mail out fliers to certain subdivisions to drum up business, especially in a hot market.
Most consumers know very close to what their home is worth based upon what they see going on, so we have a very educated consumer now thanks to the free [home value estimator] websites.
- Allen Studebaker Real Estate AgentCloseAllen Studebaker Real Estate Agent at North&CO.
- Years of Experience 21
- Transactions 695
- Average Price Point $599k
- Single Family Homes 567
Are CMAs always accurate?
As noted, a CMA is not a hard and fast number that every agent would arrive at, like an algebra equation, but rather is more of a range. This can make it seem like the CMA is inaccurate or contains errors. Mistakes, of course, can be made, especially if the seller is using an inexperienced or part-time agent. But many experienced agents pride themselves on the accuracy of their CMAs, and they have a track record to support their value estimates.
Studebaker says that you can always get a second opinion from another Realtor®. “Most consumers know very close to what their home is worth based upon what they see going on, so we have a very educated consumer now thanks to the free [home value estimator] websites,” says Studebaker.
Some factors can cause a CMA to be inaccurate or not reflected to the fullest extent:
- Poorly selected comps
- Homes that don’t show similar features or upgrades
- Lack of listing data
- Undisclosed undesirable features nearby, such as a busy or noisy highway
In today’s shifting market, partnering with an experienced, top-rated real estate agent to get the best possible CMA for your home is even more important. Use HomeLight’s Agent Match Tool to find an agent who knows the market and is plugged into what’s happening with home sales in your area. A top agent can also help you determine if there is value in going a step further and getting a pre-listing appraisal for your home.
How is a real estate CMA different from an appraisal?
Don’t confuse a CMA with an appraisal, cautions Studebaker. While an appraiser will typically tour a home in person or at least drive by the property, a CMA is “an opinion of value based on a Realtor® doing the market analysis,” Studebaker says. “The appraiser does things a little more in-depth than the real estate professional.”
It’s important to make sure the appraiser or real estate professional who performs either task is proficient in the market they work in. “You wouldn’t want somebody doing a market analysis in Scottsdale when they live in Tucson, they may not know the market as well,” adds Studebaker.
Typically, the buyer’s lender will arrange for a home appraisal and the buyer is responsible for the cost. In some instances, sellers may want to go ahead and get a pre-listing appraisal. A pre-listing appraisal is done when a home is harder to value.
Having a pre-listing appraisal can help avoid issues as you navigate the selling and closing process on your home, especially if any of the following applies:
- Hard-to-value unique features like a tennis court, in-home theater, or other unusual add-ons that most houses do not have
- Rural location with no recent comps
- Excess acreage or unimprovable land in a flood zone
- Historic features not found in other properties
home inherited by multiple heirs who can’t agree on a price
- You are not receiving any viable offers
A pre-listing appraisal is not always a good idea for sellers as it does cost money, anywhere from $300 to $600 or more. The buyer’s lending company will also still require a regular appraisal which may result in different appraisal numbers. Your real estate professional will be able to give the best advice on what types of appraisals will need to be done on your property, especially if it has unique selling points that may be hard to get comps on.
Can I perform my own comparative market analysis?
A home seller can theoretically research their own set of comps and piece together a DIY CMA, but because so many factors play a role in placing value on a home the effort would likely be arduous and may prove inaccurate.
One useful tool for sellers to start with is HomeLight’s Home Value Estimator, which will give you an initial idea of what your home might be worth right now. The home value estimator is not a CMA or an appraisal, but it is a good starting point for a ballpark figure.
Selling a house and moving is already a high-stress life event. The best recommendation to get a CMA is to reach out to a top real estate agent familiar with your market and let them put their professional skills and experience to work for you.
Bottom line: Get a CMA for your home from an experienced agent
A comparative market analysis is not an appraisal, but it is a critical tool to help determine the right listing price for your home. A CMA is created by comparing your home to other similar properties in the area using a wide variety of data points.
Given the great importance of a CMA, you’ll want to partner with a top real estate agent who can guide you through the home selling process from step one — before the “for sale” sign even goes in the yard. In most cases, a home seller can get a CMA from a local agent at no cost.
Use HomeLight’s Agent Match tool to find the best agent in your area who can create a comparative market analysis for your home.
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