A comparative market analysis (CMA) is an evaluation of the current market value of a specific property by comparing it to other similar properties in the same area that have recently sold, are currently listed for sale, or were listed but didn't sell.
Real estate agents or brokers typically conduct a CMA to help sellers determine the best price for their property, or to help buyers determine a reasonable offer to make on a property they are interested in purchasing.
Here are the typical steps involved in preparing a comparative market analysis (CMA) for real estate:
Gather property details: The first step in preparing a CMA is to gather details about the property being evaluated. This includes information such as the property's location, size, number of bedrooms and bathrooms, lot size, and any unique features or upgrades. This information can be obtained through a property inspection, online real estate databases, or through the homeowner.
Identify comparable properties: The next step is to identify comparable properties in the same area that have recently sold, are currently listed for sale, or were listed but didn't sell. The goal is to find properties that are similar to the subject property in terms of size, location, age, and features.
Collect data on comparable properties: Once the comparable properties have been identified, the agent or broker will collect data on each property, such as the listing price, sale price, number of days on the market, and any features or upgrades.
Analyze the data: With the data collected, the agent or broker will analyze it to determine a suggested listing price or offer price for the subject property. This analysis will take into account factors such as the number of comparable properties, the condition of the subject property, and current market conditions.
Prepare the CMA report: The final step is to prepare the CMA report, which will include a summary of the property details, the comparable properties that were used in the analysis, and the suggested listing price or offer price for the subject property. The report may also include additional information such as market trends and insights into the local real estate market.
It's important to note that the accuracy of a CMA will depend on the quality of the data collected and the expertise of the agent or broker conducting the analysis. A well-prepared CMA can provide valuable insights for both buyers and sellers in making informed decisions about pricing.
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