What is a Comparative Market Analysis?
Comparative market analysis report may consist of two pages to fifty and even more pages. The length and complexity of CMA reports depends on the experience and skills of short sale agent. Typically short sale comparative analysis report contains the following data.
Active listings are the homes currently listed on the market for short sale. Active listing matters to the extent that they are competitive options for home buyers. These listings are not the real indictors of real estate industry because the sellers can ask whatever they want and does not mean that the demanded prices are actual ones.
Pending sales are not yet closed but they are formerly active listing, so they are not a comparable sales. You will not be able to know the actual sold price until the transaction closes. It depends on listing agent if he is willing to share the information about the pending sale. However, pending sales do indicate the direction the market is moving. If your home is priced above the list price of these pending sales, you could face longer DOM.
The homes that have been closed in the real estate industry within the past six months are your comparable sales. An appraiser will use these sales when appraising your home, along with the pending sales which will likely have closed by the time your home is sold.
Off-Market / Withdrawn / Canceled
These are the properties that were listed on the market but have been withdrawn due to a variety of reasons. The hire prices are the main reason for removal of these homes form real estate market. The median prices of this group will almost always be higher than the median prices of comparable sales.
This group represents the highest median sales prices because they did not sell and were probably unreasonably priced. Listings also expire because they were not aggressively marketed or because the home was in need of repairs. Some of the expired listings also may be shown as an active listing listed by a new agent at a new price.
Similar Square Footage
Appraisers compare homes based on square footage. Larger square-foot homes are worth less per square foot than smaller square-foot homes. The variance among a group of median-priced homes ideally should not exceed more than 200 to 400 square feet, plus or minus.
Similar Age of Construction
Ideally, the age of the home the year it was built should be within a few years of other comparable sold homes. Mixed-age subdivisions are common.Brand new homes up the street are selling for more, you cannot command the same price as a new home.
Location, location, location is the phenomena of real estate industry, but what it means, do you know? A home located in the middle of city has more value as compared to the home that is located in the factory area. Compare your home to those in similar locations. If your home sits across the street from a power plant, look for other homes with power plant exposure or those located along railroad tracks, among other undesirable locations.