A Comparative Market Analysis, or CMA, is a report that gives homeowners a more accurate idea of the value of their home. When it comes time to sell that home, a CMA also gives you an idea of what the list price should be. A number of items are looked at to generate these reports, including those below. Data is collected from your local area to insure that you are comparing apples to apples.
Start with Location
Your home should always be compared with similar properties in the same area. Some neighborhoods are pricier than others, even if you have similar properties. You are paying for the address as much as the physical house. Locations within neighborhoods also have variable degrees of desirability. A home near power lines, railroads or busy roadways is usually not as desirable as one in a quieter part of the neighborhood, all other factors being equal.
Age and Condition
Many neighborhoods have properties that were built at the same time. In this case, the focus would likely turn to the maintenance of the homes. Renovations, especially those that add a bathroom or extra bedroom, would usually carry a higher value than homes in their original configurations. Adding a swimming pool, hot tub or classy deck also increases value.
In some cases neighborhoods built at different times sort of blend together, particularly at the edges. In this case you could have homes built years or even decades apart. When you compare properties in your neighborhood, make sure you know exactly when they were built. Remember the apples to apples comparison mantra.
Check Out Home Listings
Look at active home listings in your area. Compare the asking prices with those on the sold home listings. The latter will give you a better idea of what home buyers were willing to pay. Looking at both listings will help you come up with a more realistic price.
Another list to check out is one for pending home sales. These are homes that are pending sale but not on either of the prior two lists. Though the pricing is not finalized, you can get an idea of how it stands in the final negotiation stage. This also gives you a better idea of current trends, as opposed to the six month window on the sold home list.
Off The Market Properties
Another list to check out is one for properties that are no longer on the market. It could mean that the seller changed his mind about selling and pulled the property. Or, that seller may have pulled the property because he wasn’t able to get anything near his asking price. Usually the property is relisted when market prices come back up. This list gives you an idea of a cap to put on your asking price. Just compare all the other factors before making the final decision.