How a Comparative Market Analysis Can Help You When Buying a Home

One of the dilemmas facing prospective home buyers as they search and tour homes for sale is knowing whether or not the asking prices are in line with current values. There is a way to find out. You can start by asking your real estate agent to collect comparables and prepare a Comparative Market Analysis (CMA). This report indicates market trends by showing whether similar homes in the area are selling for above or below the asking price of the home(s) you've selected.

Once your real estate agent does his research and gives you a list of comparables, you can figure out the average cost per square foot for the area, and determine if the home you want compares favorably with those figures. Here's how to calculate: Total the square footage of several homes and divide by the number of homes to get an average. Then, total the "sold" prices of each home and divide by the number of homes to get an average selling price.

Now, divide that average selling price by the average square footage to produce the average price per square foot for homes in the area. When you multiply that average price per square foot by the square footage of the home you want, you'll discover how your choice compares, and then you'll know if you're looking at a fair price.

Other factors like the seller's motivation or urgency may also affect your offer, so talk with your real estate agent about that CMA and take the next step!

Mike Morgan
Team Morgan
“For Every Move You Make"

Whether you want to buy or sell a home in Miami, Palmetto Bay, Pinecrest, Dadeland Walk, South Miami, Coral Gables or Cutler Bay, you can depend on the Morgan team of realtors to assist you every step of the way during your real estate transaction.