CMA stands for competitive or comparative market analysis. It’s basically a generalized look at the local market that can be used by both a buyer and seller. A buyer can use this report to research what houses are selling for in a specific area and make an offer on a home. A seller would use the report to help them price the house in a competitive market.
The information in a CMA is gathered from multiple listing services. Because different realtors use different types of software, the information in a CM A can vary from realtor to realtor. But in general these reports are generated based on the buyer or seller’s preference such as type of house, square footage, property size, number of bedrooms and zip code to name a few things.
Once the report is created, it provided the buyer or seller information of recently sold homes in a particular area. It also provides information on how long houses in a specific area had been on the market before selling, if the price of the home had been dropped and other information based on the search.
A CMA report can provide a lot of useful information. But what it can’t tell you is why a buyer overpaid for a specific home or why a seller dropped the price on their home. Of course you can speculate and but an answer will not be confirmed in a CMA. The seller may have been desperate to sell because they are relocating or downsizing. A buyer may over pay because they really want that specific neighbourhood and didn’t want to wait for another home to go on sale in that area.
This is why you can’t confuse a CMA with a home valuation. You and your real estate professional can use the CMA as research to help Price your home just right or make a fair and decent offer. Please be aware that the information in a CMA is only as good and the most recent information. So make sure you keep updating the report.
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