Action Talent What Is Question

What is a Comparative Market Analysis (CMA)?

A Comparative Market Analysis (CMA) is a tool used by real estate agents to estimate the current value of a home. By comparing your property to similar homes recently sold in your area, we can help you determine a competitive listing price. The goal is to price your home to attract qualified buyers while maximizing your return.

Action Talent What Is Question

What is a Comparative Market Analysis (CMA)?

A Comparative Market Analysis (CMA) is a tool used by real estate agents to estimate the current value of a home. By comparing your property to similar homes recently sold in your area, we can help you determine a competitive listing price. The goal is to price your home to attract qualified buyers while maximizing your return.

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Distinguishing Between an Appraisal, CMA, and Broker Price Opinion (BPO)

CMA

A CMA is prepared by a real estate agent to help homeowners price their home for sale. It’s less formal than an appraisal but provides valuable insights based on local sales.

Appraisal

A formal appraisal is performed by a licensed appraiser, usually for lending purposes, to determine the market value of a property. It is a detailed, formal process used by lenders to approve mortgages.

BPO

A Broker Price Opinion is similar to a CMA but is typically prepared for banks or asset managers. It is used to estimate the value of a property, often in foreclosure or for refinancing purposes.

Which is Right for You?

If you’re selling your home, a CMA is the most appropriate tool. For lending or refinancing, a formal appraisal or BPO may be required.

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The Three Major Sections of a CMA Report

A typical CMA report includes three key sections, each offering valuable insights for homeowners:

  • Active Listings: Homes currently on the market that are similar to your property. These listings show your competition and help gauge how your home compares.
  • Sold Listings: Recently sold properties that closely match your home. These are crucial for setting a realistic price based on what buyers are willing to pay.
  • Expired Listings: Homes that were listed but didn’t sell. Understanding why these properties failed to sell (often due to overpricing) helps us avoid the same mistakes with your listing.
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What Information is Needed to Prepare a CMA or BPO?

To prepare an accurate CMA or BPO, we need the following details about your property:

  • Square footage: The size of your home is a major factor in determining its value.
  • Property condition: Homes in better condition usually fetch higher prices.
  • Age of the property: Newer homes tend to sell for more than older properties, but well-maintained older homes can still command high prices.
  • Upgrades and features: Any recent improvements, like a new roof or updated kitchen, can add value.
  • Neighborhood trends: Local market trends, including the rate of sales and average time on the market, play a big role in pricing.

For a BPO, additional information such as foreclosure status or potential rental income may be required.

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Best Sources for CMA and BPO Data

To gather the most accurate information for your CMA or BPO, we rely on several key sources

MLS

Multiple Listing Service

The most comprehensive source of recent sales and current listings.

PR

Public Records

Property tax records, ownership history, and zoning information

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Neighborhood data

Information on local amenities, schools, and future developments.

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Market Trends

Data from real estate platforms, industry reports, and local trends that affect property values.

Best Sources for CMA and BPO Data

To gather the most accurate information for your CMA or BPO, we rely on several key sources

MLS

Multiple Listing Service

The most comprehensive source of recent sales and current listings.

PR

Public Records

Property tax records, ownership history, and zoning information

ND

Neighborhood data

Information on local amenities, schools, and future developments.

MT

Market Trends

Data from real estate platforms, industry reports, and local trends that affect property values.

Location

Homes in different neighborhoods or even on different streets may have significantly different values.

Size

Larger homes typically sell for more, but price per square foot is also a key metric.

Condition & Age

A newly renovated home will often command a higher price than an older, unrenovated one.

Amenities

Features like a pool, updated kitchen, or additional bedrooms can affect a home's value.

Market Timing

Recent sales are more reflective of current market conditions than older sales.

Major Elements of Comparison Between Comparable Properties and Your Home

When preparing a CMA or BPO, we adjust for key differences between your home and comparable properties

Major Elements of Comparison Between Comparable Properties and Your Home

When preparing a CMA or BPO, we adjust for key differences between your home and comparable properties

Location

Homes in different neighborhoods or even on different streets may have significantly different values.

Size

Larger homes typically sell for more, but price per square foot is also a key metric.

Condition & Age

A newly renovated home will often command a higher price than an older, unrenovated one.

Amenities

Features like a pool, updated kitchen, or additional bedrooms can affect a home's value.

Market Timing

Recent sales are more reflective of current market conditions than older sales.

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How We Calculate Square Footage for Accurate Valuations

Square footage plays a major role in determining your home’s value. We calculate the gross living area (GLA), which includes heated and finished spaces such as bedrooms, bathrooms, and living rooms. Basements, garages, and unfinished areas are typically excluded unless they are considered part of the livable space in your market.

How We Prepare a CMA to Help You Understand Local Values

We tailor your CMA to show you the true value of your property in the local context. Here’s how we do it:

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Recently Sold

We collect data on at least three recently sold properties in your area that closely match your home’s size, condition, and features.

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Active Listings

We compare active listings to understand your competition and adjust for differences.

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Expired Listings

We analyze expired listings to see what doesn’t work in the market, ensuring your home is priced strategically.

This gives you a clear view of where your property fits into the local market and what buyers are likely willing to pay.

Creating an Absorption Analysis for Your Neighborhood

An absorption analysis helps us understand how quickly homes are selling in your area. We calculate the absorption rate by dividing the number of homes sold per month by the total number of homes on the market. This tells us how long it would take for all current listings to sell, assuming no new properties are listed.

For example, if six homes sell per month and there are 30 homes on the market, the absorption rate is five months. A lower absorption rate means a faster-moving market, allowing us to price your home more aggressively.

Preparing a Broker Price Opinion (BPO) for Lenders

When working with lenders or asset managers, we prepare a Broker Price Opinion (BPO) to estimate the value of a property. The BPO includes:

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Condition

A detailed evaluation of the property’s condition.

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Trends

Market trends and comparable property data.

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Opinion

An opinion on the expected sale price, including any recommended improvements to maximize value.

This BPO helps lenders understand the subject property and the market area, guiding them in decisions related to loans, foreclosures, or asset management.

Request Your Free Comparative Market Analysis Today

Curious about your home’s current value? Our free Comparative Market Analysis (CMA) provides you with the insights you need to price your home right and sell fast. Whether you're planning to list soon or just exploring your options, we're here to help.

Get Your Free CMA Now!