No two homes are identical, which is why choosing a sales price or offer price for a
home can be challenging. That’s where the comparable market analysis, or CMA, can be
useful.
What is a CMA?
The CMA is a side-by-side comparison of homes for sale and homes that have recently
sold in the same neighborhood and price range. This information is further sorted by
data fields such as single-family or condo, number of bedrooms, number of baths, zip
codes, and many other factors. Its purpose is to show fair market value, based on what
other buyers and sellers have determined through past sales, pending sales and homes
recently put on the market.
How is the CMA created?
CMAs are generated by a computer program supplied by your real estate agent’s
multiple listing service (MLS). The MLS is available to licensed members only, including
brokers, salespeople, and appraisers, who pay dues to gain access to the service’s public
and proprietary data, including tax roll information, sold transactions, and listings
input by all cooperating MLS members.
Listing agents generate CMAs for their sellers, and buyer’s agents create them for their
buyers so both sides know what current market conditions are for the homes they’re
interested in comparing.
How accurate are CMAs?
The CMA is a here-and-now snapshot of the market, based on the most recent data
available, but it can instantly be rendered obsolete by a new listing, or a change of
status in a home with the same criteria. Why? The market is constantly changing – new
listings, pending sales, closed sales, price reductions, and expired listings.
CMAs can vary widely, depending on the knowledge and skill of the person inputting
the search parameters to the software as well as the number and type of data fields
that are chosen. That means some features may not be included.
As informative as the CMA is, it should only be used as a tool and should not substitute
for your real estate professional’s knowledge and advice.