HFG DIGITAL NEWSLETTER
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| HFG DIGITAL NEWSLETTER |
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The Value of a Comparative Market AnalysisOne of the first things you will hear when talking to any Realtor is the term “Comparative Market Analysis” (CMA). You may wonder what this is and why you need one. A CMA is a gathering of data on homes that are similar to yours. Usually it is limited to homes in your neighborhood (unless you possibly live in a more rural area) and best when compared to homes that have similar features to yours, although this isn’t always the case if those are very limited in numbers. A CMA is most often used to help determine the value of the home, whether you are trying to figure out how to price your home to sell it, or an appraiser is trying to figure out its value. Perhaps you are wondering how much your home has gained in value since you purchased it. Maybe you want to see if the county assessor’s valuation is correct because you are thinking about appealing that figure. A CMA can be useful in any of these circumstances. If you are looking to sell your home, a CMA can be extremely helpful to you and your Realtor when determining a listing price. It shows how competitively you need to price it, the condition and prices of other homes currently on the market, how long other homes have been on the market and whether or not they’ve had to change their listing price or sale conditions. Keep in mind, especially in this market, that a CMA must be analyzed rather than just taken at face value. A home that sold for an extraordinarily low price may have been a foreclosure. In addition, some sellers list their homes as being in excellent condition when in reality they are not, and the sold price can reflect that. The active listing prices are not necessarily a reflection of market value either. It may be that a seller wants to get a particular sum for their home because they need to pay off their loan, they are underwater (or close) on their mortgage, or they simply think they can get more than market value. A CMA will also show you how quickly a house went under contract, although it will not show what the buyers offered. A CMA can also show which homes were withdrawn, canceled or expired from a sale. Sometimes sellers change their minds, a job offer is withdrawn, or the price is too high for the market. There is a wide variety of reasons as to why a listing may be withdrawn or canceled. Your Realtor will be happy to discuss the details of how a CMA can benefit you whether you are thinking about selling your home or just wondering what your property might be worth. |
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