What is a Comparative Market Analysis (and Why You Need One)?

Do you know what your home is worth?

The DFW housing market is incredibly complex and constantly changing. Prices can go up or down with the season, in accordance with other financial markets and events, or based on regional trends.

It’s important to know the most up-to-date market value of your home so you can determine the best possible time to sell in order to maximize your profits.

One of the best ways to determine this is by getting a Comparative Market Analysis, or CMA. This will help you get an accurate sense of your home’s true value, as well as how it compares to other homes in your area.

Of course, if you’ve never gotten a CMA, it can be confusing — and some people may think you can just use a Zillow Zestimate and call it a day when determining a listing price. At Hometiva, we work with you to look at recently sold properties to get an accurate value for your home before putting it on the market.

What is a comparative market analysis?

A Comparative Market Analysis (CMA) is an evaluation of a home's value based on similar, recently sold homes (called comparables) in the same neighborhood. In real estate, you or your realtor will do a CMA on your home when you list it for sale by comparing similar current, expired, and sold listings in the area, to price your home effectively. While we would all love to price our house at what we think it should sell for, a CMA helps you get the best price in the timeframe you want.

When doing a CMA, you'll compare everything from the number of bedrooms and bathrooms, to the square feet in the home, upgrades and renovations you've done, and more to determine your home's value, and subsequently a good sale price.

Is a comparative market analysis the same as an appraisal?

A comparative market analysis is not the same as an appraisal, which is performed by a licensed appraiser. A real estate appraisal is done by a licensed real estate appraiser and is most often used by lenders when issuing mortgages for refinancing or buying/selling a home. Appraisals, although, can also be used for any other reason a determination of value is needed or wanted.  

A CMA is prepared by a real estate agent and represents an estimated sale price for a property.  

What should I look for in a CMA?

Not all CMAs are created equal. If you want to get the best price for your home without waiting many months to sell it, you want a professional to do your CMA right. Here are some things you want to look for in homes you are comparing:

Similar Neighborhood

Check out the homes in nearby communities. Are the houses in that neighborhood in the same condition and do they have similar features to your home and neighborhood? The quality of the neighboring amenities really goes far in adding or taking away value from your property. You should take into account the school district and prevalence of other single-family homes as well when researching recent home sales.

Similar Size

Look at the square footage of similar homes in your area. You want them within 20% of your home’s size. The price per square foot declines as the house gets more substantial, so compare homes that are most similar to your square footage.

Similar Condition

Look at online listings of similar homes and comparable sales. Note the condition of the house, the price per square foot, property taxes, and any neighborhood perks, such as an HOA or a gated community. Try to compare to similar properties as close in condition and features as you can find.

Do the Math!

After you’ve gathered all the data from neighboring houses, it’s time to crunch the numbers. Figure out the price-per-square-foot, and add or subtract money based on certain amenities.

While completing a Comparative Market Analysis is undoubtedly worth the time to do it, it may be something you want to leave up to professionals who know precisely what to look for and can do it a lot faster. Whether you do it on your own or call in some help, doing your due diligence before listing your home will save you headaches and could even help you bring in a lot more money!

If you’re interested in getting a CMA for your home, Hometiva would be happy to provide one for you and walk you through the ins and outs. Simply complete our online form to get the best selling price for your home.

There’s no obligation — the CMA is on us!

Tabor Campbell, Listing Agent at Hometiva

hometiva.com