A comparative market analysis, frequently referred to as a CMA, is an in-depth report on the current value of a particular home. A real estate agent prepares it by analyzing the selling prices of similar homes in the area. This tells the homeowner how much the home is worth in the current market in order to avoid pricing it too low or too high, and it can also help homebuyers determine if a home they’re looking at purchasing is a good value. This is a good tool for looking at the value of new homes in Nashville or wherever you look. Here’s a brief guide to CMA for those who are unfamiliar.
In-depth Neighborhood Knowledge
While it may seem like running this type of analysis is fairly simple it’s a little more complicated than you might think. It’s important for any real estate professional to have an in-depth knowledge of the neighborhood when helping a client purchase or sell in order to produce the most accurate CMA possible. To come up with the best listing price, you’ll need to gather knowledge about both current and historical rental and sales values of the real estate in the area. It’s important to be able to accurately assess the quality of a neighborhood, identifying the least and most attractive blocks, as well as its proximity to things like schools, parks, hospitals and other amenities. Curb appeal of other homes in the area can play a part too as well as how close the neighborhood is to a noisy roadway, dilapidated buildings, and so on.
Pre-Assessing the Property
The next step a real estate agent should take as part of this analysis is to gather as much information about the particular property in question, including the size of the home, the year is was built, the architecture, construction type and condition. This is something that’s a key part of the process whether the agent is selling a home for his or her client or working with a potential homebuyer. After assessing it online, they’ll need to visit the property in person for the most accurate report, noting the actual condition, layout, size, landscaping and features such as a finished basement, pool or oversized lot.
It’s also important to check for issues that could affect the price, such as a lack of central air conditioning, a roof in need of repair, etc. if that’s not done it could cost the buyer a significant amount in the long run, potentially thousands of dollars with roof replacements costing anywhere from over $5,000 to well over $10,000 according to homeadvisor.com.
Looking at Comparable Properties
Next, the agent needs to search for the most comparable properties in the neighborhood, ideally at least three of four for the most accurate analysis. This is often done by searching real estate sites or scanning MLS for properties that have recently closed or sold, pending sales, active and expired listings. In a hot real estate market, prices of homes sold the year before are likely to be irrelevant so it’s important to look at properties that have the most current date of sale, ideally within the last several weeks. In slower markets, the previous few months can usually be used.
Be sure the comparable properties are as close as possible, ideally in the same neighborhood or within a mile away. Features should be similar to, including square footage, the number of baths and bedrooms, lot size and architectural style.