The Competitive Market Analysis or CMA is a report that will help you learn more about your marketplace. Many real estate professionals offer this free service or as part of their service package. A CMA offers you a snapshot of the real estate conditions in your area and can be a very useful tool when setting your own asking price.

Here are some of the elements contained in most reports:

1. Homes for sale. This is an inventory of the current active listings in the Multiple Listing Service (MLS). It will give you an idea of how many other homes will be competing for buyer attention. Consider the asking prices for homes similar to yours, but remember the asking price is just that. It does not reflect what buyers are willing to pay.

2. Pending sales. These are active listings that are now under contract. Additional data on the sale will likely not be available until after the closing.

3. Comparable sales. This is perhaps the most revealing and interesting component. It details all the sold listings in the last six months and their sale prices. Look carefully at the numbers. Here you can discover how much buyers are willing to pay. This data can help you and your agent craft a realistic list price.

The final piece of the CMA puzzle is to make sure you look specifically at homes that are similar to yours. To make the most of this data, search for a home that is comparable to yours in location, size, age, amenities, etc. Use the expertise of your Realtor® to analyze the numbers and his or her market knowledge to adjust the numbers up or down accordingly.

1. Begin with a good understanding of your finances. Examine your budget and income and determine how much you can pay as a down payment and afford each month (mortgage plus bills). Remember to factor in a cushion for unexpected costs such as unemployment.

2. Understand the lending process. Take time to learn about credit, mortgage terms, interest rates and points. Keep in mind that when you assume a mortgage you may be buying your dream home, but are also taking on a significant debt.

3. Get pre-approved. Once you have a handle on your finances and the lending process, get pre-approved for a mortgage. This gives you defined parameters for your home search and makes you a more appealing prospect to sellers.

4. Search out a reputable lender. Ask for recommendations from your real estate professional and from friends and family. Research the lenders you are considering before making a selection. Of course you should shop around for the best rates, but remember there are other important factors at play.

5. Listen to your heart and look ahead. If something seems too good to be true, it probably is. Also, take the time to analyze the fine print and make sure the mortgage terms are still manageable five, ten, and twenty years from now.