If you are confused by the abbreviation, then let us clear it for you, CMA stands for comparative market analysis. To be very specific and precise, CMA is done to know the value of certain properties in the same district.
Nowadays, the business of real estate is so into the market, and with property prices reaching up the seventh sky, it is very important to analyze your research. It doesn’t matter if you are the real estate agent or the buyer. It is equally important to the analysis.
Well, don’t worry, it is very easy, and you can do it by yourself at home. Stay with us, and we shall guide you step by step.
Let’s start with basic dos and don’ts first for you to keep in your mind:
Do an appropriate comparison:
Ever heard the phrase, an eye for an eye? Well, in this case, compare the same sort to properties, meaning 125sq foot to 125sq foot to make your CMA reliable.
Do the supply and demand analysis:
As you may know, the higher the demand, the higher the value and prices go. So maybe the corner house might be in demand, and its price may vary from the rest of the properties in the same division.
Don’t change the divisions:
Stay in the same division in which you like to compare properties in the same division or sub-division.
Don’t use outdated data:
To get a reliable and accurate analysis, use the current data or maybe five years old, not more than that.
Now you must have some idea on how to conduct CMA, you can read more about it here and, if you are still confused then don’t worry, keep on reading it.
HOW TO DO A COMPARATIVE MARKET ANALYSIS IN JUST 3 STEPS:
DO YOUR RESEARCH:
The primary step is to do in-depth research and collect the data on certain websites like centris.ca, newspapers, visit certain real estate agents, etc. find the list of prices and amenities of homes that are sold recently or currently are on sale. To make your life easier, make an excel sheet, and keep all your data in one place.
DETERMINE THE PRICES:
After all the research, now you will be able to evaluate the price per square foot by using the simple formula that is:
Per sq. foot formula: selling price/ square feet
You’ll have an approximate answer and then you may determine the price of the certain property yourself.
REVIEW THE LOCATION:
Check if it is a commercial area or not, is it in the middle of the city or at the end. All these things matter while buying a property. The process goes up high if the property is in the heart of the city surrounded by the commercial area.
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ALL IN ALL:
By following these simple three steps, you will have a certain clear path on how to do a CMA, and you will see how beneficial it will turn out to be. Investing in properties is a huge step, which requires a lot of monetary assets, so don’t be a fool but rather do some homework and invest very carefully.
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