How Does A CMA Work When Valuing A Property?
A CMA, or Comparative Market Analysis, is a process that real estate agents use to determine the value of a property. It involves analyzing recent sales data for comparable properties in the same area. Here's how a CMA works:
Collect data: The first step in a CMA is to collect data on comparable properties in the area. This includes properties that have recently sold, properties that are currently on the market, and properties that were listed but did not sell.
Determine key features: The next step is to determine the key features of the comparable properties. This includes the size of the property, the number of bedrooms and bathrooms, the age of the property, and any additional features that may affect its value, such as a pool, a garage, or a view.
Adjust for differences: Once the key features have been determined, the next step is to adjust for any differences between the comparable properties and the property being evaluated. For example, if the property being evaluated has one less bedroom than a comparable property, the value will be adjusted downward to reflect this.
Calculate value: After all adjustments have been made, the next step is to calculate the value of the property being evaluated. This is done by taking the average value of the comparable properties and adjusting it up or down based on the differences between the properties.
Provide a report: The final step is to provide a report of the CMA to the client. This report will include a detailed analysis of the comparable properties, a list of the adjustments made, and the final value of the property being evaluated.
In conclusion, a CMA is a valuable tool for real estate agents to determine the value of a property. It involves collecting data on comparable properties in the area, determining the key features of those properties, adjusting for any differences, calculating the value, and providing a report to the client. By using a CMA, real estate agents can provide their clients with an accurate and fair estimate of the value of their property.