What is a Comparative Market Analysis?
A home’s price is dependent on a variety of things: where the home is, when it’s listed for sale, what the state of the kitchen is, and more. If you’re trying to price your home before putting it on the market, it can be difficult to figure out how much it’s worth. Many sellers are also emotionally tied to the home and may think the property is worth more due to these feelings.
When you work with Team Heffernan, our knowledgeable real estate agents will provide a Comparative Market Analysis or CMA. What is a CMA? It estimates your home’s value based on recent sales of similar real estate in your area.
Whether you’re hoping to buy or sell a house, understanding the CMA is imperative. Selling your home (fast) depends on pricing it right. Here’s everything you need to know about a CMA:
Comparative Market Analysis Explained
Real estate agents create CMAs by looking at comparables, or comps. Comps are recently sold properties that are similar to your own home or property – or if you’re a buyer, the one that you want to make an offer on. Similarity is key.
Imagine that your place has four bedrooms, two and a half baths, and is around 3,000 square feet. Your neighbor’s down the block is also a four-bedroom, two-bath house that’s 2,800 square feet and it sold recently for $450,000. Your place is probably worth about the same price.
So how alike do these homes need to be? Comps should ideally:
- Have the same number of bedrooms and bathrooms
- Be located within a quarter-mile of your home
- Be within 200 square feet of your home’s size
- Should be in your ZIP code
- Should be in your school district
It’s also important that CMAs reflect recent sales. Markets can change very quickly and it’s best not to go back more than six months.
A Comparative Market Analysis also takes into account the final sale prices of the homes. The more comps you use, the better – and it’s easier to triangulate a home’s price. If you have at least three comp properties, you can average their prices and get a good idea of what your home is worth.
Taking Condition into Consideration
Remember: when you look at recently sold comps, there are quite a few nuances that are needed to be taken into consideration. These things vary, but typically that looks like condition, lot size, extras, and curb appeal. You can’t compare a fixer-upper with something that already has a bunch of upgrades.
Additionally, if you did make upgrades to the property, you can’t add the full cost of your remodel to the home’s price when you go to sell. Typically, homeowners should expect a 56% return on the money they have spent renovating and upgrading their home.
Ask a Real Estate Agent for CMAs
Most real estate agents will provide you with a CMA for free – especially if you’re selling your home. CMAs are also a great way to figure out which agent you would like to work with.
We are happy to provide you a CMA before you even sit down and have a conversation with us. We want to help you sell your home, and we will work hard for you!
How to DIY a Comparative Market Analysis
We are happy to do a CMA for you, but we understand if you want to do your own analysis. You can find comps by searching online at various listing sites. You can also assess how much your house is worth by using an online home value estimator. While not the most accurate, these programs will scan your area, crunch the numbers, and deliver a very rough estimate of how much your house is worth.
Figuring out the price of your home online is a great starting point, but there are still many nuances to consider. Computers can’t take everything into consideration that a human can, but consider it a starting point for further research that can be completed by you or your real estate agent.
Get Ready to Sell, Start with a Comparative Market Analysis
Some market knowledge is harder to DIY, so it is best to stick with the professionals at Heffernan Real Estate to best price your home. We will work to get you the most for your home and get the accurate comp pricing to know where you stand.
We love to help people – you can count on us to sell your Tampa area home. Call/text today to learn more about our in-depth Comparative Market Analysis service!