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What is a CMA and Why Do You Need One?
CMA is real estate shorthand for "Comparative Market Analysis." A
CMA is a report prepared by a real estate agent providing data
comparing your property to similar properties in the marketplace.
The first thing an agent will need to do to provide you with a CMA
is to inspect your property. Generally, this inspection won't be
overly detailed (s/he isn't going to crawl under the house to
examine the foundation), nor does the house need to be totally
cleaned up and ready for an open house. It should be in such a
condition that the agent will be able to make an accurate assessment
of its condition and worth. If you plan to make changes before
selling, inform the agent at this time.
The next step is for the agent to obtain data on comparable
properties. This data is usually available through MLS (Multiple
Listing Service), but a qualified agent will also know of properties
that are on the market or have sold without being part of the MLS.
This will give the agent an idea how much your property is worth in
the current market. Please note that the CMA is not an appraisal. An
appraisal must be performed by a licensed appraiser.
The CMA process takes place before your home is listed for sale.
This is a good assessment of what your house could potentially sell
for.
CMAs are not only for prospective sellers. Buyers should consider
requesting a CMA for properties they're seriously looking at to
determine whether the asking price is a true reflection of the
current market. Owners who are upgrading or remodeling can benefit
from a CMA when it's used to see if the intended changes will
"over-improve" their property compared to others in the
neighborhood.
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