The Comparative Market Analysis

Many clients do not understand the true purpose of a comparative market analysis. While there are many different reasons to use a CMA, there are a few reasons that truly stick out. A CMA is essentially a tool used by real estate professionals to get the most accurate depiction of property value. CMAs are intended to give the best estimate of property based on current market conditions. While this is just an estimate, it allows real estate professionals to come up with a “best guess.” That “best guess” is the closest you can get to actual price without an appraisal. Here is how a comparative market analysis helps in the real estate marker.

Some of the top real estate agents use CMAs in order to fine-tune their estimates of  home value. A CMA is used to get an estimated worth with accurate precision. This precision is used and is essential for the task of estimating value when it comes to your market. While real estate professionals are experts in real estate, the market in your area is always changing. Having the best knowledge of the area, knowing current market trends, and evaluation of the home condition all benefit the CMA. Having this information allows your real estate agent a home value estimate for what is out there.

Comparative Market Analysis And Agents

Having access to the MLS (multiple listing service) gives your real estate agent a powerful tool. An online property tool that allow you to gain access to all sorts of information about the market in your area cannot be overlooked. This tool is one of the strongest available in the real estate market because of the instant access to first-hand property information. This database allows real estate agents to use and track listings for information about the area. Being able to have access to an MLS also allows your real estate agent an opportunity to find information that may have been previously left out of an online estimate from someone like Zillow.

Experienced real estate agents will use every tool at their disposal to help their clients. Agents are experts in their specific field of real estate, and they are very talented at being able to dig up important details that may be overlooked. Having an agent that knows what they are doing and how to use their information can help get the best estimate of value aside from an appraisal.

A CMA Controls Bias

While this is not a bad thing necessarily, people are inheritably bias of their own possessions. Whether it is their first car, a college degree, or even stocks in their favorite companies, people are bias. With this bias comes emotional attachment to whatever type of investment we are talking about. The same goes when talking about someone’s home. Many people think that they have the best house on the market because they are emotionally tied to the property. It is in human nature to take a personal bias into something. This is where a real estate professional comes into play. They are able to use a CMA in order to keep the emotions and personal bias out of the real estate process.

HomeLight had a study that recently revealed 52% of top real estate agents are tempted to overprice. This phenomenon is especially true in hot market conditions. With the biggest challenge that sellers face in the listing process being setting a price, it is important to use a CMA. A CMA is used to help eliminate this bias from all parties involved. Overpricing a home does no good and can ruin a deal when it comes to an appraisal. This makes using a CMA crucial to eliminate that gut feeling to overprice because the market is hot.