Comparative Market Analysis (CMA)
A Comparative Market Analysis (CMA) is an evaluation of similar, recently sold homes (called comparables) that are near a home that you want to buy or sell. Buyers, sellers, or real estate agents perform a CMA to establish a fair price range for the home under consideration. The price range from the CMA can then be used as a guide for deciding on an offer price or a listing price.
Basically, performing a CMA involves finding homes that are similar to the home being bought or sold, and conducting an in-depth comparison of its size, age, location, and features. It all boils down to one question: compared to other, comparable homes in this area, how much is this home worth? Answering that question involves looking at a fair amount of data on other homes in the current market.
The process for doing a comparative market analysis includes:
- Defining criteria for selecting comparables
- Determine a list of quality comparables
- Evaluate the comparables
- Adjust comparable values for differences in size, condition, location, etc
- Estimate the value of your target home