If you are planning to sell your home, you ll want your agent to provide you with a comparative market analysis, which is often called a CMA. If you re selling your home, it s definitely a great idea to understand what a CMA is , what it should include, and why it s so important.
Basically a comparative market analysis is a special report of comparable home sales. It can be anywhere from two to 50 pages, depending on the complexity of the specific report. Standard CMAs should include the following important data on them for you to peruse.
Active, Pending, and Sold Listings
First of all, you ll find that a comparable market analysis should include active, pending, and sold listings. Here s the breakdown of those listings:
Active listings are the listings of homes for sale at the current time. This matters because they are your competition, but it doesn t mean that they indicate the market value and the prices may not all be realistic either. They won t reflect the market value until they actually do sell.
The pending listings are listings that used to be active, but they are currently under contract. Since they haven t closed, you can use them for comparable sales.
Sold listings include homes that have been closed on in the previous six months. These can be used as comparable sales, and it s important that you take a close look at these listings.
Properties Canceled, Withdrawn, or Off the Market
Another thing you ll find listed in a good comparable market analysis is a look at properties that have been canceled, withdrawn, or taken off the market. They can be taken off for various reasons. They may be taken off the market because of seller s remorse, because of repair requests made, because the seller decided to fire the agent, or they were over priced.
There are also expired listings that may be on the CMA. The sale prices are usually high, which shows that they were probably priced unreasonably. Sometimes listings can expire because they needed repairs or they were not marketed aggressively.
An Examination of Comparable Sales
The comparable sales are the sales that are close to your own home that you are trying to sell. Homes on the list should be very close to the condition, size, and shape of your current home. Here are important things that should be considered when it comes to the comparable sales:
Construction Age Comparable sales should have a similar construction age as your home. They should be within just a few years of your home.
Square Footage The square footage is another thing that homes will be compared on. Homes that have a larger amount of square footage are worth less for each square foot than the smaller homes. Comparables should be within in 200 400 square feet of the home you re trying to sell.
Home Location The location is going to have a lot to do with the value of your home. This means that your comparables have to be in a similar location.
The Condition of the Home The condition of your home is important too. If it s remodeled, it s worth more. If you have several baths, your home will be worth more. If it needs maintenance, it will be worth less.
These are just a few of the things that should be on a comparable market analysis. The whole goal of the CMA is to give you an idea of comparable sales so you know what type of price your home can command and it can give you a better idea at how successful you ll be at selling your home as well.
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