Your real estate agent will use available data to compare your potential purchase with other homes in the area. These comparables (comps) can help draw parallels and raise red flags if a price is too low or high. The more comparables, the more accurate the CMA.
Let’s review a quick example: You’re viewing a 4 bedroom, 3 bathroom, and 2,300 square feet home for sale in Aurora, CO. A home down the street with 4 bedrooms, 3 bathrooms, and at 2100 square street recently sold for $350,000. Your realtor would use that $350,00 and other nearby transactions to create a CMA. You can compare your home’s price with recent transactions for similar style homes to get a ballpark for what you should be paying.
According to Colorado real estate experts, The Storck Team, comps will ideally have the same number of bedrooms and bathrooms, have similar square footage, be built around the same time, and be located in the same school and jurisdiction zones. A home for sale in Aurora would not be a comp to a home for sale in Parker, in most cases. Your home’s price will be compared to other sold home prices, not the listing price of other homes on the market. Because real estate prices move quickly, a CMA should be no more than six months old.