What is Comparative Market Analysis (CMA)?
The comparative market analysis is essentially a report that tells a buyer how much homes are really worth, based off of various comparisons. Real estate agents usually compare the homes for their clients by looking into a specific Comparative Market Analysis into homes that have recently been sold, as well as those that are currently for sale. The length of the report usually depends on how experienced an agent has, or by how much it costs to develop.
Why is Comparative Market Analysis Important?
It is important to look into the CMA when buying a house so that you know if you are really getting what you pay for. Additionally, it allows a seller to come up with a suitable price from their home, enabling it to sell quickly. The CMA is a very important process for anybody partaking in the real estate market, whether it be by buying, selling, or renting.
The Comparative Market Analysis compares homes to one another based on different categories. Comparing these factors below allow real estate professionals to gauge an average price for specific properties.
One of the primary influencers of the price of a home is its square footage. Additionally, it is one of the most common ways houses are compared to one another.
Aside from the overall size of the home, amount of livable space including bathrooms, bedrooms, dining, living and family rooms all contribute to property value.
2.Time Of Construction
The age of a home provides buyers with valuable insights. Older houses often have foundation issues, wear and tear, pest problems, and outdated styles. When looking at the comparative market analysis, homes of similar age will be grouped together.
3.Amenities and Upgrades
Typically, before a sale, owners will renovate their homes to bring it up to parr among those nearby and similar to them. The value is reduced for homes that are outdated, have issues, or lack certain amenities. All of these aspects coincide with that of the age of the house. A remodeled, renovated home is going to be far more expensive than a home that seems like it will require a ton of money to fix.
Some things that people may care about include garage size, pools, the landscape of the yard, and the type of flooring. Looking into installing and renovating some of these features into your home, based off of similarities to surrounding homes, will give you a great chance of closing quickly and for a higher price.
Even if a home is new, has been recently been remodeled, or has great square footage, it can still have poor value as a result of its neighbors and surrounding buildings. If the home is near an airport or landfill, it is going to be far less valuable than one located across the street from a fancy mall.
In order to potentially increase the value of your home, you will want to pull out and emphasize the good characteristics of your neighborhood, such as nearby schools, shopping centers, movie theaters, parks, and recreational facilities.