A comparative market analysis, also known as CMA or COMPs, is an examination of recent sales data of similar properties in the same neighborhood to help determine the current range in value and an asking sale price. A CMA is the best way to look at recent sales and other data from a few different perspectives such as sold, pending sales, expired listings and withdrawn from the market. Each set of data provides insights into the market in a neighborhood for a variety of property types such as a single family home, warehouse, multi family home, mixed use building, commercial building, vacant land, cooperative and condominium apartments.
The best way to calculate a property’s comparative market value is to look at recent sales data of similar properties. Based on the size of the house or building and the size of the lot it’s situated on and the sales date for identical type of property in close proximity to the subject property an experienced real estate broker or agent will estimate what should be the asking price for the property. When the asking price of the property is estimated properly the final sale price should be within a small range of the asking price.
When you are planning to sell your real estate, your ability to attract qualified, motivated buyers always comes down to timing and asking sale price! The 3 scenarios of how price dictates the number of inquiries on the property, the number of showings and the number of written bona fide offers are:
If the property is priced much too high for what it is (property type), where it is (location, location, location) and market conditions, you will not receive any inquiries, requests for showings or offers.
If the property is priced slightly above the market, there may be a few calls and showings but no offers.
If the property is priced right, there will be consistent inquiries, requests for showings and the offers will come.
The goal is to locate the highest price that will still make the property competitive on the open market.
How to arrive at a realistic range in value and asking price for the property? A CMA looks at recent sales data, usually within a 3 to a 6 month time frame in the neighborhood, with as much as an apples to apples analysis as possible. You must keep in mind that NO 2 property types are exactly the same. The variable of location, high or low percentage of walkability, the neighborhood where is the property is located and that specific location on a particular block can be a big influence on pricing. Similar age and type of construction of a similar property type (frame, brick, cinderblock), similar amenities (loading dock for 3 trucks and 15 foot high ceilings), (2 or 3 baths), upgrades (new kitchen and baths), building size, lot size and property condition (fixer upper or completely remodeled) are all important variables in calculating price.
CMA vs Appraisal
Most appraisers are not local to a neighborhood like real estate broker and agents. Many appraisers call real estate brokers and agents for insights into properties sold. The fact is that local real estate agents and brokers are always in the trenches where the buying and selling is happening and they are in a great position to know neighborhood trends and values. It is always beneficial to properties owner to contact a local real esate company with great reputation.
A thorough CMA should include:
Sold listings (from the Multiple Listing Service), Pending listings (they can indicate the direction that the market is moving in), Expired listings show what did not sell, for the reasons of being too highly priced, poor condition or not marketed aggressively by the broker, Off The Market/Withdrawn/Cancelled listings happen for different reasons including being priced too high and Active listings which are currently for sale and your competition for buyers. Active listings do not always indicate current market value.
Many houses are emotion based purchases based on curb appeal, the amount of natural light (exposure), layout, room sizes, age, desirable amenities and walkability!
If you are planning to sell your property and you would like to know the current market value, call us to provide you with an in depth CMA a no cost and with no obligation on your part. We at Accord Real Estate Group have been doing appraisals, CMAs and BPOs for many types of clients for many years. We pride ourselves on the accuracy and reliability of our opinions of value.
Contact us. You will be very happy that you did.
