What is a Comparative Market Analysis?
What is a house worth? What’s a fair price for an updated two-bedroom home in an up and coming neighborhood? Real estate is a numbers game, but those numbers come from somewhere, and who determines them can seem mysterious if you’re unfamiliar with buying or selling real estate.
Learning What is a Comparative Market Analysis in Real Estate
All homes have a price. That price is determined by several factors from the year it was built to the schools it’s zoned for and everything between. If you’ve just moved to a neighborhood or buying a home for the first time, how do you know the prices you’re looking at are fair? With a CMA.
How Comparative Market Analyses are Created
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.
Getting a Comparative Market Analysis from Your Agent
Your real estate agent should offer a CMA free of charge. Agents have mountains of real estate data at their disposal, but they also know the unique characteristics of neighborhoods and can make insightful comparisons that could go ever the head of the everyday home shopper.
How a Comparative Market Analysis Can Help Seller
Sellers want the highest price they can get for their home, but they don’t want the home to sit on the market for months or years. A CMA helps sellers determine the prices of similar homes so they can set a fair value. If a seller chooses a price point that’s too high the home can sit on the market forever, but a CMA helps set a good starting price point.
Comparative Market Analysis vs. Appraisals
A CMA and an official appraisal are two separate real estate documents. A CMA is put together by your realtor to make sure the price is fair while an appraisal is an educated estimate performed by a professional appraisal. Your realtor can use available data to make educated guesses, but only an appraiser can use their tools and expertise to present an official price point.
Using Cost Market Analysis for Your Next Home Purchase
There are many tools and resources meant to help you determine fair prices during real estate transactions and CMAs are among the best tools that protect both buyer and seller. If you’re looking at a particular home or neighborhood, talk to The Storck Team to get a CMA in your hands and start planning your budget.