How I do my Comparative Market Analysis CMA
This is where the magic happens! I essentially do my comparative market analysis like an appraiser will do their appraisal. Location, size, type of home, amenities, close date and condition are reviewed. Just picking some cost per square foot numbers is an inadequate system.
About how I create a comparative market analysis. I look at active, sold, withdrawn and expired homes. I look in the MLS and in public records.
•Comparables include sales from all real estate agents and companies
• I check public records in addition to MLS
• The best measure of value is sold listings
•Active listings demonstrate supply and competition
•Withdrawn/expired listing usually demonstrate
an overpriced listing.
• I create my CMA comparative market analysis the same way an appraiser does
• The comparable homes will ideally be in the same neighborhood
or a maximum of a one mile radius from your home
• One story houses are compared to one story houses…never
compare a one story to a two story home• Homes should be within 10% in size
• The home should have closed escrow in the last 90 days
• Make adjustments for number of bathrooms, garage spaces, fire place, pool, spa, view lot, age
• The adjustments are not the value to purchase the amenity. Apraisers use much lowere numbers to adjust for amenities….typically a pool will get an adjustment of $10,000…cost for a pool is far more
• Once a range is established you can now compare to the homes currently on the market….note how long these homes have been on the market…strategically price the home with all these factors in mind
Please do not trust Zillow or some other automated system to give you an accurate comparative market analysis. Without going into a home and seeing the condition you cannot evaluate the value.
Over pricing is a deadly sin. The people in the market for your home won’t be looking at it because it is out of their price range. The people in that price range won’ look at it because it does not compete with the homes in that price range. This is a huge mistake.
This is a critical piece of the puzzle. Once the comparative market analysis is done it is time to get excited.