“CMA” stands for Comparative Market Analysis. A CMA is one of the tools used by experienced REALTORS®* to estimate the value of a specific real estate asset. A CMA is an informal appraisal that, like an actual appraisal, establishes value by evaluating and comparing similar properties (usually three to five) that have recently been sold (within the past six months, but preferably three months) in the same area. These comparable properties are often called “comps.”
In the performance of the required due diligence for a CMA, a REALTOR® will evaluate the neighborhood, gather details about the subject property, select the comps, adjust for differences, and determine the sold price per square foot after adjustments. [Since value isn’t based solely on price per square foot, dollar adjustments are made for any differences (inferior or superior) between the specific real estate asset and the comps.] The finished CMA details square footage, condition, location, number of bedrooms, number of bathrooms, and lot size. It itemizes the requisite adjustments and, finally, offers a value estimate.
For Sellers: A CMA should be used to estimate a property’s value to set the market value for a listing. The property’s market value is the best price that isn’t so low it leaves money on the table and not so high that the property doesn’t receive offers. Potential sellers often think they need an appraisal when all they really need is a CMA prepared by an experienced REALTOR®.
For Buyers: A CMA should also be used to ensure that a buyer is formulating and making a competitive offer on a property. Using a CMA helps calculate an offer that will be taken seriously but doesn’t go overboard.
Lewith & Freeman invests in the careers of its REALTORS® by providing extensive expertise, tools, and resources. This professional investment ensures that every Lewith & Freeman REALTOR® will provide all brokerage clients with incomparable service. Since all licensed professionals at Lewith & Freeman are REALTORS®, clients will always have a skilled expert on their side throughout their transaction.
*REALTOR® is a federally registered collective membership mark which identifies a real estate professional who is a member of the NATIONAL ASSOCIATION OF REALTORS® and subscribes to its strict Code of Ethics.
