What is a CMA and Why Do You Need One?

CMA stands for Comparative Market Analysis. A CMA helps your real estate agent determine the fair market value for your home. The CMA is developed by your realtor who will perform a brief inspection of your home (this is only a quick informal inspection) then your agent will make a comparative analysis of other similar properties in your neighborhood and combine it with information derived from a listing service to develop and accurate assessment of the condition of your property and it’s worth.

If you are planning any changes or additions to your property, before the sale of your home, you will need to inform your agent at the time of the inspection.

Please note that a CMA is not an appraisal. If you wish to obtain an actual appraisal of your home it must be performed by a licensed appraiser. The CMA is an educated estimate of your homes value, based on current market trends and trade information.

The CMA process takes place before your home is listed for sale. This is a good assessment of what your house could potentially sell for.

Buyers may also be interested in having a CMA performed on any property that they are interested in purchasing. This CMA would be performed by the buyers agent and will be helpful in determining whether the true value of the home is reflected in the asking price.

CMA’s are also important for keeping you from making to many improvements to your property. What’s this you ask? It’s simple really. There is a point, when considering home improvements, that you can spend too much. If for instance your home is situated in a neighborhood of homes ranging from $175-to-$250,000 (max), you would not want to invest in home improvements that would raise your home much higher than the maximum sold in your neighborhood. If you did, you run the risk of losing money at sale time.

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