A CMA, short for Comparative Market Analysis, is an analysis of market prices for comparable properties done for the purpose of establishing a realistic sale price for your home.

CMAs are done by real estate agents. They should include data on properties recently sold, and properties recently placed under contract but not yet sold (settled), and properties listed but later withdrawn from the market, and properties currently available on the market.

All of these situations are relevant to the pricing of your home, and so all should be considered in a good CMA.

For example, if a house just like yours in the same area did not sell after 180 days on the market, and was recently withdrawn from the market, the price was probably too high.

A CMA takes each comparable houses in turn and adds or subtracts dollar amounts based on the difference between your home and the other home under consideration. If your home has an extra bath, a fully updated kitchen, a deck, a garage, a two car garage instead of a one car garage, and so on, it will sell for more than the other did. The question that is answered here is “What is an extra bath worth in this neighborhood (or this building, or in this style of house?”

Just as an example, an extra full bath on an upper floor in typically worth $12,000-$15,000, depending on the situation.

Of course the quality is also important. For that reason it is best if the agent doing the CMA has actually been inside the other comparable property, to be able to judge quality. This is often not possible—for example if the house sold two months ago, and I the agent did not visit it while it was on the market, I certainly cannot visit it now. In this case, the agent doing the CMA must base his thinking on the words in the MLS listing or on a discussion with the agent representing that home.

One way to judge a good CMA is to ask which of the comparable properties the agent has visited. The more the better.

CMAs are often laid out in a column format, like a spreadsheet, so each item can be easily seen and analysed.

Beware the agent who throws three listing from the MLS on the table and asserts “They are selling for $xxx as you can see.” Most of the time, it’s more complicated than that!

The more time and effort an agent puts into a CMA, the better the product.

The better you understand the analysis, the better the result.

By the way, an appraisal is not a substitute for the CMA. An appraiser, though highly skilled, does not visit other homes he uses as comparisons, and does consider only sold properties. That is, he does not take into account the homes on the market now that are competitive with yours. The appraiser’s work is not intended to establish a list price that will sell your house. It is intended to tell the bank making a loan on the house whether they risk lending more that the value of the house. Only a CMA can tell you what you need to know.

The various internet “what’s the value of your house” sites are also not nearly as accurate as a good CMA. The data is all from published sources—there are no visits to the home or even “drive bys”. My experience is that these numbers can be off by up to $100,000!

Call Kit or email for second opinions on CMAs you receive from other agents.