{"id":24962,"date":"2021-06-28T07:37:38","date_gmt":"2021-06-28T14:37:38","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=24962"},"modified":"2026-03-22T15:43:10","modified_gmt":"2026-03-22T22:43:10","slug":"what-does-a-comparative-market-analysis-do","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/what-does-a-comparative-market-analysis-do\/","title":{"rendered":"What Does a Comparative Market Analysis Do? 5 Things to Expect"},"content":{"rendered":"

You\u2019re ready to sell your home, and it\u2019s time to get down to the business of pricing. With all the property information available online these days, what does a comparative market analysis<\/a> (CMA) do \u2014\u00a0and will you need one if you\u2019ve already got a listing price in mind?<\/p>\n

In short, a comparative market analysis is an instrument real estate agents use to determine an asking price for your home. When you receive a CMA, it will likely be in the form of a thick physical or digital packet featuring charts, facts, figures, and photographs<\/a> of houses.<\/p>\n

Done right, a CMA weaves together key pieces of information, including the sale price of other nearby homes and local trends for your market, to offer a complete overview of all the variables that could impact your home\u2019s value. If you\u2019re unfamiliar with this industry-standard tool for pricing real estate<\/a>, consult our list of the top 5 things you can expect a CMA to deliver on.<\/p>\n

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<\/a> Source: (Africa Studio \/ Shutterstock)<\/figcaption><\/figure>\n

1. Put your home in a broader market context<\/h2>\n

You know your house inside and out \u2014 the good, the bad, and the ugly. You could name the sturdy material of your roof<\/a>, discuss the lovely sunroom<\/a> out back ad nauseum, and are used to warning guests of the bedroom door that has never shut quite right.<\/p>\n

But even with this intricate familiarity of the property, you can\u2019t price your house in a vacuum. Its value is interconnected with your surroundings<\/a>. External factors like mortgage rates and local housing inventory levels will influence what a buyer can and is willing to pay. To pinpoint a price, you need to put your house in the perspective of the larger market \u2014 and that\u2019s exactly what a comparative market analysis is designed to do.<\/p>\n

At the heart of the CMA, you\u2019ll find a list of \u201ccomps\u201d or comparable sales<\/a>. These are nearby active, pending, or recently sold listings<\/a> (going back a maximum of three to six months) that offer a point of reference as to what your own house is worth. Listed for each comp will be key information including the number of beds and baths, square footage, amenities, heating and cooling features, number of fireplaces, school district, and more.<\/p>\n

The comps section will also pull in any available photos of the featured houses and the \u201cremarks\u201d describing the highlights of the property, such as a breakfast bar or high-end appliances. A CMA should ideally feature no fewer than five comps, but better ones may have upward of 10 properties included<\/a>.<\/p>\n

Using these comps, the agent creating this report will be able to determine a price range for the group of properties as well as an average sales price to inform their analysis. Details such as your ZIP code\u2019s median listing price, average days on market, months of inventory, and average price per square foot may be added to the report<\/a> as additional indicators of how competitive the market is and what your home will sell for.<\/p>\n

2. Get more detailed than a web estimate<\/h2>\n

When you need to know how much your home is worth, an online tool such as HomeLight\u2019s Home Value Estimator <\/a>can be a great starting point. Our tool pairs housing market data from multiple trusted sources with your own personal insights about your home, including whether you have a single-family property or condo and how much work the house needs. We\u2019re able to pull information from tax sources, as well as the sales history and records for properties, to estimate your property value. This can be a quick (not to mention free) option for homeowners who\u2019d like to do a quick value-check up<\/a>.<\/p>\n

However, a top real estate agent can fine-tune the estimation of what your home is estimated to be worth with greater precision, which is essential for the critical task of pricing your home for the market. Knowledge of the area, insights into buyer trends and preferences, and deep evaluation of the home\u2019s characteristics and condition gives your real estate agent a leg up on any instant home value tool out there as far as accuracy goes. Here\u2019s where a real estate agent\u2019s expertise comes into play:<\/p>\n

Ability to hunt for missing data<\/h3>\n

Online property tools may have varying levels of access to what\u2019s known as the multiple listing service (MLS)<\/a> for your area, which is the holy grail of direct, first-hand property information as the database that real estate agents use to track and share listings. In addition, some public records could be missed or left out of an online estimate.<\/p>\n

An experienced agent, on the other hand, will leave no stone left unturned in digging up important details that could shed light on trends for the locale or what your home is worth, even if they have to run a separate search for it.<\/p>\n

\u201cWhat I do is, I dissect the entire market, but also even title reports, since not every property makes the multiple listing service,\u201d says Zandra Ulloa<\/a>, a top real estate agent in San Diego. \u201cIt’s very important that when you hire a professional that they’re pulling from every avenue that has information.\u201d<\/p>\n

Accounting for recent upgrades<\/h3>\n

If you\u2019ve been diligent about keeping your home fresh and modern over the years while taking care of routine maintenance, you want to be sure you don\u2019t under-sell the property. On the other hand, you can\u2019t assume that you\u2019ll recoup your home investments dollar for dollar. Based on their first-hand experience with the area, an agent will be able to determine how much value to add for updates like new flooring, updated cabinets and countertops, and remodeled bathrooms \u2014 which even the most detailed home value estimator could fail to capture.<\/p>\n

\u201cWe dig pretty deep,\u201d says Ulloa. \u201cI ask for a list of repairs. I ask for a list of upgrades. I also work backward and say, \u2018OK, I understand you may believe your house is worth $1 million, but 9 out of 10 times, the buyer is online. So, when you have a third party site that indicates that your home value may be only $925,000, I have to fight the good fight to justify why you, Mr. Seller, are asking for $75,000 over that price.\u2019\u201d<\/p>\n

Changing buyer preferences<\/h3>\n

Living through a pandemic has caused many Americans to re-evaluate their priorities at home<\/a>. Today, buyers may be more willing to pay for certain features such as private outdoor space and a dedicated home office than they were in previous years, and fast-moving trends will be more easily accounted for through a nuanced CMA. For example, real estate agents estimate that homes with pools are now worth 69% more than they were prior to COVID<\/a>, with backyard swimming holes adding over $27,000 in additional home value today. If you think about it, a digital valuation tool will have a hard time factoring in the buyer \u201cswoon\u201d factor shaping current property values.<\/p>\n

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<\/a> Source: (Luke Chesser \/ Unsplash)<\/figcaption><\/figure>\n

3. Replace emotions with facts and data<\/h2>\n

Of all the investments people make in life \u2014 from their first car, to their college degree, to the stocks and bonds that fuel retirement \u2014 none carry the emotional weight of a home<\/a>.<\/a> It\u2019s hard to separate your own opinion from the reality of market value when you\u2019re blinded by memories and a sense of pride in a house you\u2019ve taken great care of.<\/p>\n

A study from HomeLight revealed that 52% of top real estate agents<\/a> cite the temptation to overprice, especially in hot market conditions, as the biggest challenge sellers face in the listing process. So when you take steps to part with the home you love<\/a>, go with a CMA \u2014 not your gut.<\/p>\n

The same reasoning applies to selling a home that you may have negative or nonchalant feelings toward. When a loved one passes away,<\/a> a marriage goes belly-up<\/a>, or life takes you in a new direction, you might be tempted to ditch a place quickly, without regard to its potential and maximum value. A CMA can stop that from happening and help you command a fair price for the property.<\/p>\n

4. Give you accuracy without the costs of an appraisal<\/h2>\n

A CMA is kind of like a middle ground between an online home value estimate and an official appraisal. To obtain an appraisal, you\u2019d need to hire a licensed appraiser to evaluate the home, create a report, and assign a value based on their findings. Any lender financing a home will require an appraisal before closing, and you will likely need an appraisal to take a step like refinancing your mortgage.<\/p>\n

While appraisals are generally trusted for their accuracy in the industry, they do cost an<\/p>\n

average $450-$550<\/a> apiece. Unless you have a unique property or your agent is struggling to find comps, an appraisal shouldn\u2019t be necessary to gauge pricing \u2014 you can do it all with an agent’s CMA. In addition, an agent\u2019s CMA won\u2019t cost the seller any extra (most agents will include a CMA as part of their listing services). And thankfully, a top real estate agent should be able to determine with a high level of accuracy what the home will eventually appraise for, so that there aren\u2019t any surprises during closing.<\/p>\n

5. Instill trust in your agent<\/h2>\n

A CMA can also be a great test of your agent\u2019s experience level and dedication to the job. As you\u2019re interviewing different agents, most should offer to provide a CMA for free<\/a>. When you receive a CMA, check for these items to see if it\u2019s been done professionally:<\/p>\n