Whether you are buying or selling a home, your real estate professional can give you a snapshot of the local market known as the competitive or comparative market analysis or CMA.
CMAs are generated from multiple listing service data. They’re convenient reports that help sellers choose a listing price and buyers to make offers on a given home.
CMAs vary greatly depending on the search parameters that are input by the real estate professional, by type of home (detached vs. attached), postal code or by street, number of bedrooms, baths and living areas, square footage, and numerous other search criteria.
They also tell you which homes have recently sold - six months, three months, one month, and which homes are currently on the market in the area and price range you’re interested in. As many fields of information as there are, some criteria simply can’t be listed in a CMA. If the MLS has a field for “ocean views,” you’ll know. But if not, you’ll have to learn more in the remarks section that is filled in by the listing agent. There you might find “great views.” But who is to say what makes a great view?
CMAs results may vary even between identical homes
One property may simply offer better drive-up appeal or is in better condition than the other, and that will be reflected in the sales price.
Last, buyer and seller motivation can’t be quantified. You don’t know why a seller agreed to take less for their home or why a buyer paid more for another home. Family problems, corporate relocations and other reasons all play a role. What you can learn from the CMA is how long the home took to sell. If it was quick, the seller was highly motivated. If it didn’t, it was probably overpriced.
CMAs are Tools
For these reasons, CMAs are not home valuations. They are tools to use alongside your real estate professional’s knowledge of the market. They may have house-to-house knowledge of the market and be able to tell you why they think one home sold for more than another.