Comparative Market Analysis or CMA explained

CMA is real estate abbreviation for "Comparative Market Analysis." A CMA is a marketing report prepared by a real estate agent providing data comparing your home to similar homes in the marketplace that are close to yours and that have sold recently (within 6 months or a year). The realtor also shows you what homes are for sale now.

The reason why you need one is so that you can compare your home to homes that have sold and the ones for sale. That way you can price your home correctly. Real estate agents always say "Price it right" and it will sell! And it is true! A Metro Detroit home that is priced right will sell faster than one that is over priced for the market.

The agent should ask you basic questions about the home. Then the agent will pull all the homes in your area and in your city that are similar that are "for sale". The agent will also will have pulled all the homes that have sold in your area recently and that are similar to yours in square footage and basic features (such as bedrooms, bathrooms, garage).

Please note that the CMA is not an appraisal. An appraisal must be performed by a licensed appraiser. A comparative market analysis is a real estate agents opinion of what your house is worth based on recent sold homes. CMA may be a fancy brochure in a neat little folder or it may be down to earth with just all the listing and sold sheets. Either way it is good.

The CMA process should take place before your home is listed for sale. This is a good assessment of what your house could potentially sell for. Many agents and will list at the highest price you request. But what good is it if it does not sell and you have to reduce the price month after month because you did not look at a CMA. Going with an agent because he says he can get an unrealistic price is the wrong way to pick an agent. Why would your house sell for $50,000 more than the same houses in the neighborhood with the same great features? It won't. Buyers can compare each house and they are going to buy the best value in the similar home.

CMAs are not only for prospective sellers. Buyers should consider requesting to see all the recently sold properties in the area. The buyer needs to determine whether the asking price is a true reflection of the current market. Knowing what has sold and for what price will help you make a knowledgeable decision on what to offer on a home.

Russ Ravary your Metro Detroit realtor serving Oakland County, Wayne County, and Livingston County