Welcome to the Topic “Competitive Market Analysis Real Estate”
CMA provides an estimate of a home’s worth by comparing it to recently sold homes in the surrounding region that are comparable to the home in question. Real estate agents and brokers compile CMA report to assist sellers in determining an appropriate selling price for their properties and, less frequently, to assist purchasers in formulating competitive bids. An individual can conduct their own comparative market analysis by researching real estate listing websites, such as zip analyzer, to find comparable properties (often known as “comps”).
The comparative market analysis (CMA) needs to consider the area’s general quality to arrive at an accurate listing price—or to ensure that a home you’re interested in is a good value. Where are the blocks that have the most appeal? What is the proximity of the community amenities? How close are the annoyances to the community? What are the rules of the HOA? What are the academic programs? Exist any problems with the appearance of the street?
Suppose a real estate agent or broker is doing the comparative market analysis (CMA). In that case, they will look at the current listing (if there is one) and go to the subject’s home in person to obtain information about it. They will consider the home’s age, the architectural style, the construction, the condition, the layout, the finishes, the landscape, and any upgrades or modifications that have been made.
Find three to five homes in the neighborhood that are comparable to the one you’re interested in that have sold in the recent past and are located as close to the one you’re interested in as they can get. Comps should ideally be found within a mile of the subject property and belong to the same school district if at all possible. Look at houses that are comparable to the one you’re interested in in terms of the number of square feet, the size of the lot, the number of bedrooms, and the number of bathrooms. Because of the quick nature of price changes in the real estate market, the more recent the information, the better. Suppose the home is situated in an unusual area, such as facing out over a golf course or a body of water. In that case, comparable homes should also be situated in this manner.
The following step is to account for any variances between the home under consideration and the properties being compared. Suppose the real estate agent or broker is experienced enough. In that case, they will be able to put a monetary value on each of the discrepancies and alter the value of each comparable property accordingly. It may appear counter-intuitive, but a positive adjustment is made to the value of the comparable property if it has a characteristic that is inferior to the feature that is being compared to in the subject home and vice versa. As an illustration, if a comparable home contains an additional bedroom, considered a superior feature, it is reasonable to presume that the buyer paid more for the home to obtain the additional bedroom. In this scenario, you would deduct some money from the comp to account for the additional bedroom, allowing more accurate comparison of the two properties. There is never going to be a change made to the valuation of the residence in question.
After making adjustments for the discrepancies, the sales price per square foot can be calculated by dividing each comparable property’s adjusted price by that property’s square footage. Then after that, the next step would be to find out the average.
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