So you’ve made an offer on your dream home, and the seller has accepted…what are the next steps?Several things still need to happen before the deal can close, and the house can officially become
What Is A CMA
CMA stands for Comparative Market Analysis and is the examination of the prices at which similar properties in the same area recently sold. These are the reports that agents will give to show a property's value to a seller or to a buyer depending on what situation it is needed for. Why are they needed and just what are they?
A CMA is a report done to give an overview of a property's value based on other properties that have sold that were similar. When selling a home, a realtor will need to do a CMA to get an estimate of selling price for the seller. In order to do this they will do a CMA for the seller. This is not an Appraisal. They will base this opinion on homes in the area that were similar in size, number of bedrooms and baths, location and amenities such as pools or any other special features that the home may have. The date sold is also very important as going back over six months can make a big difference in pricing in an ever changing market and even over ninety days if the market has been changing quickly. They will select the closest homes to the subject using homes currently on the market, under contract and sold properties (typically three of each) to analyze. Adjustments will then be made to make all properties become similar to subject whether it is adding or subtracting value to the comparable properties used to derive at a value. This is very similar to the Sales Comparison Approach that appraisers use but it is only a suggestion for pricing based on the properties that the agent has found that were similar to the sellers home.
Different agents can look at the same property for a seller and can come up with totally different numbers as everyone has different perceptions of value and when doing CMA's all agents can use different properties so the numbers may not always come out the same. The CMA's values should be similar though if the agents doing them use comps from the neighborhood and give a range of value. There are properties that are very unique and one of a kind and are outside the scope of an agent to do a CMA, when this happens, it is best to actually have a true appraisal done.
A CMA can also be done for a Buyer who would like to be assured that the value of the home they want to purchase is correct before they make an offer by looking at sold comps in the area to find if there are at least three sold comps to substantiate the sales price.
Robin Arrow has been a licensed real estate salesperson since 1994. She began her career in Northern CA and has been licensed also in the states of Indiana and Georgia prior to moving to the Texas are....
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