Comparative Market Analysis: What Is It?
A comparative market analysis (CMA), also called a market evaluation or Realtor market analysis, is a method Realtors use to estimate a property’s market value. It helps sellers understand their home’s worth to set a competitive list price and guides buyers in determining the fair value of a property they want to purchase.
Why have a Realtor Market Analysis?
Setting the right price for your home is both an art and a science. A detailed realtor market analysis ensures your property stands out in a competitive market. This analysis includes studying comparable properties, understanding buyer trends, and evaluating local market data.
A realtor market analysis goes beyond just looking at numbers. Realtors assess key factors like the unique features of your home, its location, and recent buyer behavior. By combining these insights with the latest market trends, your realtor ensures your home is positioned to attract the right buyers.
How I do a CMA
I am sharing my expertise as an award winning Vancouver Realtor since 2005. Other Realtors may do this process differently, but this is how I do it and the results speak for themselves.
1 ) Visit the property in question
The first thing I do when requested to do a Comparative Market Analysis is to physically visit the property. Visiting the property is key! In my view, it is impossible to get an accurate idea of the market value on a property in the Vancouver real estate market without seeing the property.
2) Only analyze what I know. Local expertise is key!
I can only do an accurate market analysis on properties I know and am familiar with that are within my geographic area of specialty. If I am asked to do a market analysis on a property that is outside of my geographic expertise, I will ask to refer the client to an area expert.
3) Gather and review data both on and off MLS
Once I have seen the property, I review the data which in most cases are the comparable (Similar square footage, age, type of construction materials, number of bedrooms, number of bathrooms, lot size, etc) properties in the area that have sold in the last 30-180+ days as well as nearby properties that are actively listed on the market. I also use MLS data as well as information on private non-MLS sales.
3) Calculate market value based on relevant and current Information.
In a stable market the sold price of properties will have more relevance and in a more volatile market, asking prices will be more relevant. How long these comparable properties have been on the market as well as overall market conditions and trends will also colour my analysis. Cancelled, and expired listings will also have an impact based on based on the fact they did not sell and the reasons for that result.
4) Present a clear and understandable report with all relevant data that gives a clear idea of the property’s value.
Once I have completed the comparative market analysis, I typically email the report that will have all of the data that I used to come to my conclusion in .pdf format. I then call the client to discuss and explain the analysis and the conclusion. The Comparative Market Analysis should make sense to a potential seller or buyer and the analysis should be able to make a convincing case on the market value of the property.
WOULD YOU LIKE TO KNOW THE VALUE OF YOUR HOME in Vancouver?
Call 604-763-3136 or Email ME for a Free Market Evaluation!
FAQ: Comparative Market Analysis and Realtor Market Analysis
What is a Comparative Market Analysis (CMA)?
A comparative market analysis, or CMA, is a process Realtors use to estimate the market value of a property. It involves analyzing recent sales of similar homes, current market conditions, and local trends to help sellers set a competitive list price and guide buyers in determining a property’s value.
How is a CMA performed?
A CMA is performed by:
- Identifying comparable properties (recently sold, active, or expired listings).
- Adjusting for differences in size, features, and location.
- Analyzing market trends, such as days on market and price fluctuations.
How do Realtors use MLS for a CMA?
Realtors use the MLS (Multiple Listing Service) to access detailed property data, including:
- Sale prices of similar properties.
- Days on market for listings.
- Price trends in the area. This data forms the foundation of an accurate CMA.
Why is a CMA important for sellers?
A CMA helps sellers:
- Set a competitive list price.
- Avoid overpricing, which can deter buyers.
- Ensure their property attracts offers in line with market conditions.
How can buyers benefit from a Realtor Market Analysis?
Buyers use a Realtor market analysis to:
- Assess whether a property is priced fairly.
- Make informed decisions about offers.
- Understand how a property compares to others in the area.
How accurate is a CMA?
A CMA is highly accurate when conducted by an experienced Realtor who understands local market trends and can be relied on for decision making. However, it’s not a substitute for a formal appraisal, which involves a licensed appraiser.