A Comparative Market Analysis (CMA) is a process whereas your REALTOR® will select a series of homes (usually a minimum of three) considered to be of similar quality, design and condition to yours.
They will then perform a computer based analysis of the market to help determine fair market value of your property in relation to others in and around your neighbourhood.
In most cases, this analysis is broken down into three individual categories where each is reviewed and studied in detail.
Those categories are as follows:
So...of the three categories above, it is of my opinion that the one that would carry more weight most of the time is the careful study of recent comparable sales. Most real estate sales people will tell you that an in-depth review of recent sales will usually prove to be a very good indicator of value.
This is also a similar approach to how a home appraiser would proceed in determining a home's worth. Comparing factors such as location, property features and defects helps us to develop of an accurate picture of your property's potential market value.
I have often heard it said and have also often repeated that "A property is only worth what a buyer is willing to pay for it".
By studying recent sales, we learn very quickly what a willing public has recently paid for properties similar to yours and what you could likely command as a sales price for your own property.
So by now you have learned that the comparative market analysis is an important step of the selling process. This should be completed by a professional who has access to the necessary market information needed to complete this properly.
To be done properly, a review of recent comparable sales, current active listings and recently expired listings should make up the bulk of the comparative market analysis and this should also be completed as closely to the listing date as possible in order to ensure accurate data is gathered.
In most cases, a real estate sales person will complete this for you at no cost with the understanding or assumption that you will be listing your property with them.
Since there is a significant amount of work involved in performing this task, I would highly recommend that you are honest and up-front with your intentions.
Nobody likes to work for free and bad feelings can develop if both parties are not clear with each others expectations. If you have no intentions of listing your property with them or if you only plan to list your property for sale in the long distant future, please be kind and tell them so.
In fact, there is really no point in conducting this analysis unless you plan to sell in the near future since market conditions can change rapidly which will make the results of your analysis outdated very quickly.
In closing, a CMA should be conducted and thoroughly reviewed before you make your decision on pricing. Often times, the comparative market analysis will show you that your home is either worth more or less than you originally thought.
Either way, take the information seriously as it may very well save you money in the long run by helping you to properly price your home for a quick sale.
I'm looking forward to sitting down and reviewing your own personal CMA with you in the future.
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As an Ontario real estate professional, I take pride in serving my hometown of Cornwall and it's surrounding communities. These communities include, but are not limited to, those within Stormont, Dundas and Glengarry counties as follows: Alexandria, Apple Hill, Avonmore, Bainsville, Cardinal, Chesterville, Cornwall, Crysler, Dunvegan, Finch, Glen Walter, Green Valley, Hawkesbury, Ingleside, Iroquois, Lancaster, Long Sault, Lunenburg, Martintown, Maxville, Monkland, Moose Creek, Morrisburg, Newington, St. Albert, St. Andrews, Summerstown, Williamstown and Winchester.
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