Tuesday, February 19, 2013
What is a CMA and why do you need one for your home?
CMA stands for Comparative Market Analysis and is the best tool to estimate a value for your property by using comparable sales in your neighbourhood. So if you are buying, selling or refinancing your home's dollar value is an important number to know.
As a Seller a CMA will help you determine a correct asking price, an idea of length of time on the market and your competition if any. As a Buyer a CMA will help you determine an offer price, and if the home will appraise for financing.
What you look for in a CMA is a picture of your local market. It will include current listings, sales and expired. Current listings are your "competition". The sales represent the most recent activities and give you a benchmark of your current price. The expired listing are listings that did not sell during its listing period. This will give you an idea what is too much as an asking price. Analysing these numbers will help you avoid the dangers of overpricing your home.
Keep in mind that estimating the sales price of your home through a CMA involves a certain amount of market knowledge, current sales and some guesswork. CMA's are snapshot in time so it will change. Remember that a CMA is not an appraisal.