How Can A Comparative Market Analysis Help You?
Movoto took a poll of real estate agents, and has put together the most comprehensive summary of the Comparative Market Analysis details ever done. At least we think so!
You should click through to see the infographic, which has the best information in an easily-understood format. But, I'll summarize below. The CMA takes into account many details, including the following:
Comparable Home Criteria
You should aim for at least three matching criteria, but the more the better. Standard criteria are:
- Location: The location of a home is more than its school district. Location includes things such as a view of the ocean compared to a view of a cell phone tower.
- Type: Compare your house to a house—not a condo. Compare your condo to a condo—not a house.
- Date of Sale: You’ll want your comparables to be recent. Try to stick within a three month period. If you have to, expand to six months. Remember, the further out you go the less useful the information.
- Size: Your comparable’s square footage should be within 15 % of your home. A house that is obviously much larger than your house will probably sell for more, all else equal. Conversely, a house that is much smaller will likely sell for less.
- Neighborhood & School District: If at all possible your comparable should be within the same neighborhood and school district. Some agents use use a five mile radius within a metro area and a 25 mile radius in rural areas. It’s actually a really good idea to drive by the home to get a first hand sense of the neighborhood.
- Number of Bedrooms & Baths: Try to compare homes with similar bedrooms and baths. There is some wiggle room here, but a home with three or even four more bedrooms than your house, isn’t a strong comparable.
- Age & Style: Try to compare homes with similar styles and from the same age group. As a guideline, the older your house is the larger range there is in comparables. A home that is 80 years old is likely similar to a home that is 90 years old.
- Condition of Home: If your house is a fixer-upper in need of a new roof and some yard work, it’s best not to compare it to the immaculately maintained house down the street.
- Lot Size and Usability: You don’t want to compare a significantly large lot to a modest lot.
Click through the link above to read agent comments and feedback, which is also useful.
Next week: How does inventory look for major cities in the US?