Are CMA's Objective or Subjective?

Are CMA's Objective or Subjective?

Well, I'd say the good ones are a little of both. A CMA (Comparative Market Analysis) is not to be confused with appraisals, which are professional opinions of value written by an actual appraiser, licensed as such, and completed on state-approved legal forms. We Realtors® are not appraisers (some do hold both designations, however). 

CMA's come in all shapes and sizes, from those scribbled onto a notepad to elaborate 50-page reports. Just remember - whatever form it takes, its purpose is to show the home seller where there home fits against the current competition. I've always thought a better is Competitive Market Analysis.

A very basic CMA will show how a seller's home (the Subject) compares to others (Comps) which have sold recently. This is OK, but it shouldn't end there. I use recent solds to help determine whether value against actual current competition is "in the ballpark." 

A better CMA will also show how the subject fits amid other, similar homes now on the market. This is where true market placement takes place. I've always said that it's crucial to price properly because the last thing you want is your house to be overpriced. All that does is help sell other houses that can show either more value for the same price, or the same value for less.

So what's this about objective and subjective?

Objective CMA's rely solely on the cold, hard facts of a property. Things like year built, square footage, amount of land, number of bedrooms and bathrooms, etc. These are the things that are relatively easy to assign monetary value to and adjust for differences between the subject and a comp. 

Subjective items are much harder to do this with. Things like curb appeal, interior cosmetics, location, etc. These are the "feelings/emotional" aspects of a market analysis, and can be much more difficult to assign value to. But in most cases, they can be the difference-makers in correctly deriving market value of a property. While sellers don't get dollar-for-dollar value out of improvements they've done, you don't want to overlook them and under-price, either. Together, objective and subjective data can give home sellers a much more rounded picture. 

So if you are thinking of selling and you have one or more CMA's done on your house, be sure to look beyond the filler in many CMA's to what really matters, and make sure your CMA has both objective and subjective comparisons in it.