Comparative

Comparative Market Analysis, or CMA as it is popularly referred to, refers to a tool adopted by realtors or real estate professionals to assess the value of a property via comparing it with related properties in a particular area, which may include properties available for purchase and properties that have been recently sold in the area. In fact, Comparable Market Analysis is an inevitable term in real estate industry that helps buyers, sellers, and realtors to take an informed decision to set up a fair price range for a property in your desired location. However, this price analysis tool could help you only if it is prepared properly. Discussed further in this article are some relevant tips for the preparation of Comparative Market Analysis.

First of all, set criteria, for which you need at least three comparables. However, make sure that you don't opt for wrong comparables for the purpose. For instance, don't use townhouses to compare condos. A variety of other factors must also be considered for setting criteria, such as neighborhood, size of property, number of beds as well as baths, style and design of property, and usability of land. The next important step that is involved in the preparation of a CMA is to build a comparable list with the help of a reliable source that provides relevant information on property that was recently sold or available for purchase in your neighborhood.

Another important step in connection with the preparation of CMA is the creation of a summary statistics using the selected comparables, for which you can use a excel spreadsheet to include rate per square foot. This in turn can be estimated by dividing the rate by each comparable's square footage. Then evaluate the average figures across each of your comparables. After this, the next step is to evaluate the price of your target property, and you can calculate this by multiplying the average rate per square footage of each of your comparables with your target home's square footage. Now you will get an idea of the market price of your target property.