What is a CMA and why do I need one?

 

Property owners today have resources at their fingertips to help them determine the value of their property. Right? Yes, but if you want to understand the MARKET value of your property, be very careful which valuation tools you trust.
 
The sites that create automatic values for residential real estate are interesting--and notoriously Question Markinaccurate. They base the value on tax records and recent area home sales (sounds good, so far), but what they can't do is evaluate the characteristics that are not evident on-line. Things that are generally not part of these valuations include, higher end finish work, upscale improvements, and proximity to things such as roads, schools, and power-lines that can affect both value and speed of sale. There are also some negatives that don't show up these valuations: improvements that are below average for the neighborhood, deferred maintenance, poor presentation, and lack of cleanliness.
 
What about the tax assessment records? Those are often valued lower than market value since market value is a factor of supply and demand. A tax assessment might be a good place to start, but it won't get you to a fair market price for your home.
 
You can hire an appraiser to help you out, but they are going to charge you for the job.  
 
A local Realtor can help you by putting together a Comparative Market Analysis, also called a CMA. This takes in to account all of the factors that create value in a residential property.  For the greatest accuracy, the Realtor should have access to your home, but at a minimum you can ask for a draft CMA that can be updated later. While any Realtor® can do a CMA of your property, the better their understanding of your specific community, the more accurate it will be.
 
Remember, the Internet can provide a wealth of information, but what it can't do--at least not yet--is provide analysis beyond the statistics.  For an accurate market value of your home, you are still better off relying on a professional!

 

 

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Comment balloon 24 commentsHolly Weatherwax • August 29 2016 10:54AM

Comments

I think folks are relying too much on some of theses website that don't really explain clearly how they come up with "values".

Posted by Joan Whitebook, Consumer Focused Real Estate Services (BHG The Masiello Group) 11 months ago

I am so grateful that my MLS has a great CMA program. We find it very helpful.  Thank you Holy, great article.

Posted by Pat Braithwaite, E-Pro (Braithwaite Realty) 11 months ago

Our MLS CMA program is not very good.  Most everyone has purchased their own.

Posted by Evelyn Johnston, The People You Know, Like and Trust! (Friends & Neighbors Real Estate) 11 months ago

as long as consumers get bad info on their own they will at least need us for CMA's.  It's not... "so easy even a caveman can do it!"

Posted by Doyle Lee Austin Davison Iv, 28+ years serving Investors/Banks/Buyers/sellers (Surf City Realty 714-968-6767) 11 months ago

Not sure how a CMA considers any of these..."higher end finish work, upscale improvements, and proximity to things such as roads, schools, and power-lines that can affect both value and speed of sale. There are also some negatives that don't show up these valuations: improvements that are below average for the neighborhood, deferred maintenance, poor presentation, and lack of cleanliness." In person consultation would be appropriate for sure.

Posted by Jon Quist, Tucson's BUYERS ONLY Realtor since 1996 (REALTY EXECUTIVES TUCSON ELITE) 11 months ago

You've educated me quite a lot and I appreciate everything you're doing here for all of us

Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) 11 months ago

I've decided to give you a follow up so I can learn more information about the best of what you do

Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) 11 months ago

I actually no longer fill out a physical CMA Form , but still use the methodology is explaining the MLS Comps .

Posted by Michael J. Perry, Lancaster, PA Relo Specialist (KW Elite ) 11 months ago

Yes, I totally agree. A professional who knows the actual houses in the report, the market, and the localism factors is the one to call!

Posted by Kat Palmiotti, The House Kat (Grand Lux Realty, 914-419-0270, kat@thehousekat.com) 11 months ago

Thanks for sharing!!!

Comparative Market Analysis  takes in to account all of the factors that create value in a residential property.  The Realtor should have access to your home. The better their understanding of your specific community, the more accurate it will be.

Posted by Sham Reddy, CRS (H E R Realty, Dayton, OH) 11 months ago

I believe this is the main information the seller wants to see and the plan on how to sell their home.

Posted by Harry F. D'Elia, Investor , Mentor, GRI, Radio, CIPS, REOs, ABR (Real Estate and Beyond, LLC) 11 months ago

With so many so called expert sites like Zillow providing inaccurate information to consumers, real estate agents everywhere have one of the best skills at their disposal - the CMA or known as a:

  • Comparative Market Analysis
  • Home Valuation
  • "How much is my home worth"

Grats on the feature and sharing your information

 

Posted by Jessie Cochran, Panama City Realty Group (Keller Williams Success Realty) 11 months ago

Only real estate agents can provide accurate CMA's/Value analysis - 3rd party sites will always fall short because they do not have direct access to the property!

Posted by Jennifer Mackay, Your Bay County Florida Realtor 850.774.6582 (Keller Williams Success Realty) 11 months ago

The best tool available for a prospective seller is a market analysis prepared by a  local, experienced knowledgeable real estate professional.

Posted by Gary L. Waters, Broker Owner, Waters Realty of Brevard, LLC, ... a small office, delivering big service! (Waters Realty of Brevard, LLC) 11 months ago

A CMA in Real Estate is like the Alphabet to a kid learning it. You need to spell

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) 11 months ago

I think it is a great tool, and great for sellers in helping determine if selling is right.

Posted by David Alan Baker Laveen Realtor & South Phoenix Realtor, Your local Expert (HomeSmart) 11 months ago

Holly Weatherwax no matter how many such models are created, no one can beat the local expert!

Great post.

Posted by Praful Thakkar, Andover, MA: Andover Luxury Homes For Sale (eXp Realty) 11 months ago

Definitely more reliable than the other internet portals.  Hopefully, clients appreciate these reports, as you are taking time to prepare them.

Posted by Mike Bjork (American Pacific Mortgage) 11 months ago

Holly - great point re: tax assessments as being inaccurate or even downright misleading. For example, in our area homeowners are not obligated to let assessors into the homes, so not all the amenities may be recorded. Also, assessors may not know if improvements were done with appropriate permits and if not, they may be more of a liability than an asset. 

Posted by Olga Simoncelli, Broker-Owner, RE Consultant, Licensed in CT & NY (Veritas Prime, LLC) 11 months ago

Hi, Holly!  This post is included in today's Last Week's Favorites.  Hope you enjoy the rest of your holiday weekend!

Posted by Patricia Kennedy, For Your Home in the Capital (Evers & Company Real Estate, Inc.) 11 months ago

Hollie

Congratulations on this featured post - you certainly have covered all the reasons why a CMA by a qualified professional is important, and why using AVMs can really point you in the wrong direction as far as market value.

Jeff

Posted by Jeff Dowler, The Southern California Relocation Dude - Carlsbad (Solutions Real Estate ) 11 months ago

Good morning Holly Weatherwax,

I'm so glad I caught your post in Patricia Kennedy's weekly post featuring her favorite posts for the week! Excellent post on why relying on a professional to interpret the data is so important!

Posted by Dorie Dillard, Serving Buyers & Sellers in NW Austin Real Estate (Coldwell Banker United Realtors® ~ 512.346.1799) 11 months ago

I can see why Patricia chose to high light your post this week!  Great stuff!~

Posted by Kristin Johnston - REALTOR®, Giving Back With Each Home Sold! (RE/MAX Realty Center ) 11 months ago

Setting the right price from the start is among the most important steps toward successfully selling a home.  Helping sellers understand how the CMA plays a crucial role in setting the right price before their home goes on the market is essential. Congratulations on the featured post!

Posted by Diana White-Pettis, GRI, CDPE, CNE, WHC Upper Marlboro Homes for Sale (Exit Bennett Realty ) 10 months ago

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