Savvy home sellers always obtain a comparative market analysis (CMA) before putting their house in the market. So what really is comparative market analysis? Although the analysis can vary in terms of length from just a few pages to a full document with more than 50 pages. This length depends on the business practice of the realtor. Ideally, a comparative market analysis should contain the following data.
Active listings are the homes that are currently in the market. With regards to cma reports, these listings are important as they are regarded as your competition as a home seller. However, the listings are not indicative of the value of homes around you as the seller is at liberty to settle on any asking price. However, this liberty should not be misinterpreted that the seller can settle for an unreasonably high price and still expect to find a buyer. The sales prices can only be said to reflect the value of the homes once they houses actually sell. When it comes to the buyers, the houses sell for way much less.
Pending sales are those houses that are under contract. The sale has not been closed yet which means their sale cannot be comparable. Unless the realtor decides to share information regarding the amount of sale, such information will not be available until the sale is closed. However, pending sales can be indicative of the direction that the market is moving in terms of prices. If your property’s price is above that listed under pending sales, you will probably have to wait longer before you can find a buyer.
Sold listings are also part of comparative market analysis. These listings include houses that have been sold over the last three months of your comparable sales. These records are what appraisers use to appraise home to potential buyers. It is important to closely scrutinize comparable sales as they are indicative of the market price of your property. You can even increase the time period of comparison to six months if that makes you improve on the analysis or in the event that the sales within the three months period are not adequate enough to indicate the market direction.
Comparative Market Analysis Tools
There are various cma tools that assist agents to develop comprehensive cma reports and cma presentations. When comparing data over a long period of time, it can become challenging to just input data manually hence the need for a realtor cma software that automates the process and generates the report. In most cases, the productivity of any real estate market depends on the prevailing market conditions. A comprehensive cma report helps the realtor understand the marketplace dynamics better while at the same time offering assurance that the pricing recommendations is in line with the mlx real estate market conditions. Using a real estate cma software, the realtor can generate a comparative market analysis report in a matter of minutes.