Comparative Market Analysis also known as CMA is a way for sellers to find out how much your home could sell for and for buyers to check values before putting in an offer to purchase. The way it’s done is to find out the recently sold, currently available and homes that failed to sell in your neighbourhood.
It should consist of homes that are similar to the property you own. This could be determined by lot size, square footage, location (big street, cul de sac), number of bedrooms, garage, age of the home, maintenance fees (in cases like condominiums), etc.
· The recently sold homes helps us understand what your property’s market value is. This is the best way to know how much your property could sell for because it shows exactly what’s been sold.
We look back as far as the past 6 months.
· The properties that are currently available shows that there is competition for your buyers.
The reason why we don't only look at current listings is because sellers sometimes price their
properties higher than what it will actually sell for. But adding this into our analysis gives us a sense of what people could consider buying.
· The homes that could not sell indicates that the prices that they were listed for did not attract enough buyers for it to sell. Although there are many reasons why a home doesn’t sell, most
commonly it’s because the property was over priced. It could also be because it was on the market for too long.
Finding out the median price of each category will help us establish which price is the right price to sell.
A CMA not only tells you the possible price of your property but it will also tell you how long it will take to sell your property and also the sales price in relation to the listing price.
Estimating how long your property will take to sell is crucial because the longer a property stays on the market, the harder it is to sell at the price you would like. So as long as the CMA is done correctly and the property is listed at a reasonable price, it usually sell in less than 2 weeks in an average/good market.
A good realtor will take his/her time to search your neighbourhood for similar properties to help you establish the right price. But Michael Park believes it’s not all about the data from the computer but physically going to some of the properties to see it. No one can determine if a home is in good condition just by looking at pictures which is why Michael goes the extra mile.