What is a CMA and Why Do You Need One?

CMA, in real estate terminology, stands 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 will not be overly detailed (they are not 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 condition that the agent will be able to make an accurate assessment of its condition and worth. If you plan to make any changes before selling, let the agent know at this time.

The next step is for the agent to obtain data on comparable properties. This data is usually available through the Multiple Listing Service (MLS), 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 done by a licensed appraiser.

The CMA process take place before your home is listed for sale. This is a good assessment of what you home could potentially sell for.

CMAs are not only for prospective sellers. Buyers should consider requesting a CMA for properties they are 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 is used to see if the intended changes will ‘over-improve’ their property compared to others in the neighborhood.