What's a CMA? (no, not the Country Music Awards)
Whether you are a buyer or a seller, you WILL be benefitted by a Comparative Market Analysis (CMA). I know that sounds like a no-brainer, but there are instances in which a seller may decide to list their home for a certain price based upon the verbal opinion of a broker. There are also buyers who may decide to make an offer at a certain price, without having the data to back it up. In these scenarios, the price communicated may simply not be supported by market data. While it’s true that they may be accurate sometimes, the old saying “even a broken clock is correct twice a day” comes to mind. Buyers and sellers should expect a thorough analysis of the market from their broker when considering listing or making an offer. The broker should be able to produce such a CMA in a timely enough manner to meet their client’s needs. Generally, we can produce a CMA after physical review of the subject property within a few hours
A CMA is deep-dive comparison of comparable properties that have either sold, gone into contract, or are currently for sale. Market value is more heavily predicated on the recently sold properties, while taking into account how the property compares to those properties, and the market trend (up or down). Pending properties, while not the best for final value judgment, are good markers for what type and condition of properties are going under contract. Active listings are your competition as a seller. It’s helpful to know what other comparable properties your listing will be competing with for buyers, both in terms of quantity and quality. To sellers, this information should be utilized along with your needs and goals to determine a list price. For buyers, this information should be utilized along with current offer status of the property to determine your offer price. Every property is different, and every market is different. Your broker should help you to understand the nuances of the market to utilize this data to your benefit. Additionally, Portland's real estate market, and every city's real estate market, is going to be constantly shifting in value based upon many variables. The CMA or estimate you received 3-6 months ago is no longer accurate. Whether you're a buyer or a seller, a current CMA is a subjective "snapshot" of the property's market value at the time the report is prepared.
Finally, It should be understood that a CMA is not an appraisal. Appraisers carry a different license, and have a different function in real estate transactions. While appraisers do also use the market approach to value, they also have other methods of determining value that may be applicable, and additional responsibilities in the performance of their evaluation. We can look more into appraisals in a different blog post. A CMA is also not an automatic estimate like on Zillow and Redfin. While those estimate are sometimes relatively accurate, they should not be relied upon for accuracy.
If you’re planning a sale, we’d love to meet with you and prepare a CMA to help you determine your property’s market value. Just give us a call or send an email!