Real estate specialists often offer homeowners a Comparative Market Analysis (CMA) to determine the value of a house for sale. But CMAs are also important to anyone thinking of putting an offer in on a home. It is important information for a home buyer to know how much to offer someone for their home. It answers the question, “How Much Should You Pay for House.”
What is a Comparative Market Analysis (CMA)
A CMA is the tool used by real estate specialists to determine the current market value of a home by evaluating many factors including: location, past sales, square footage, condition of the home, improvements, need for repairs, etc.
Need a CMA?
What Is The Purpose of A CMA?
For home buyers, a CMA provides an estimate or range for a home’s value. It is prepared by a real estate professional and helps home buyers determine a reasonable offer on a home. It takes into consideration what others are selling their home for and what others have sold for recently.
The idea is to choose homes that are most similar. This means about the same square footage, number of rooms, size and location of lot, condition, etc. It is not an exact science since some homeowners may have done a compete renovation while others have not. Or one home has a 3-car garage and another only has a 2-car garage. These adjustments are also taken into consideration by the agent.
CMAs are particularly useful when the real estate market shifts quickly. An agent will notice that similar homes for sale may have had price deductions or are sitting for a long time on the market. These signs need to be considered when making an offer.
Buying a home is often the most expensive decision someone will make in a lifetime. For such a serious endeavor, the more research, the better. If you find a home you are thinking of buying, be sure to ask your real estate specialist for a CMA of that home. It goes a long way in the negotiation process. After all, everyone wants to know they paid a fair price for their home.