How to Complete a Comparative Market Analysis (CMA)

Written by Susan Willets
October 28, 2008


What is a Comparative Market Analysis (CMA)?

A CMA is a comparison of similar homes in the area that are on the market or have been sold recently (preferably within the past year). With some practice, conducting your own CMAs will be an easy way to accurately determine a reasonable asking price for a property so it will sell in a short amount of time.

How to Complete A CMA

There are several steps to completing a CMA and other information can always be added. As you gain experience and expertise, you may find other factors about properties that you wish to explore when finding your comps (comparative properties) and completing your analysis. Here are the basics:

  1. Identify the property that you want to determine the value of and gather as much information as possible.
  2. Next, head to the local courthouse to visit with the tax assessors office. Find out how much they valued property at for tax purposes. Don’t be surprised if the price is significantly higher than what you expected. They will give value for every aspect of the home possible as it determines the amount of property tax owed.
  3. While you are at the courthouse, find out how much the comp homes were assessed for as well. This will give you a good basis of the actual values of the homes to go along with the market value.
  4. In addition to the homes that you have located, search the records department to find similar homes that have sold in the last 3-6 months. Find out as much as you can about them including structural differences, amenities, upgrades and the neighborhood it’s located in.
  5. If your comps include properties that are currently on the market, great. If you don’t have any similar homes that are currently on the market, you will need to gather this information next. Most of this information is available through MLS listings that a real estate agent can access for you. If you are not working with a real estate agent yet, much of this information can also be accessed online.
  6. Finally, organize the information into an excel spreadsheet or other document that allows you to easily compare the properties and price ranges to determine where your property would fall. Take averages of the selling prices and identify low selling prices as well as high selling prices. This may directly relate to how long it took for the houses to sell.
  7. Finally, determine the asking price you would expect for a given property.

It takes plenty of practice to develop a solid understanding of the CMA process. You may want to start with properties that are already listed and research them to practice and learn which factors affect market value the most. Keep all of your records and continue researching. The more exposure and experience you gain, the easier these evaluations will come. Soon you will quickly be able to weed out the money-makers from the money-drainers among the properties listed.

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