Real Estate Term of the Day: Comparative Market Analysis & Comparable Sales
COMPARATIVE MARKET ANALYSIS (aka: Competitive Market Analysis or CMA) – an estimate of the value of property using only a few indicators taken from sales of comparable properties, such as price per square foot. These value estimates are not appraisals and do not meet the standards of appraisal as defined by USPAP – the Uniform Standards of Professional Appraisal Practice (Barron’s Dictionary of Real Estate Terms)
COMPARABLE SALES (aka: Comparables or Comps) – properties that are similar to the one being sold or appraised (Barron’s Dictionary of Real Estate Terms)
A CMA can be a very helpful, cost effective tool for a seller trying to set a list price and can prevent a seller from selling too low. A CMA is also helpful to a buyer trying to understand the true value of a home and can prevent the buyer from overpaying for a property. The analysis may also be used as an informational tool for homeowners trying to refinance their mortgage or dispute property taxes.
Here are some important items found in a CMA:
- Home Profile
- Deed Profile
- Metro Denver Real Estate Market Overview
- Neighborhood Market Overview (includes a $/sqft and absorption rate analysis)
- Market Summary of Homes in your Neighborhood
- Sold Price Analysis of Homes in your Neighborhood
- Detailed CMA for the Home with Detailed Adjustments for Improvements/Upgrades
- Comparable Sold Home Profiles
- Estimated Sales Price Range
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