The comparable market analysis, otherwise known as a CMA, is a popular tool real estate agents use to help consumers determine their listing prices when they're selling a home.
A CMA can tell you what other sellers are asking and what prices others accepted. A CMA can also tell you much more -- how similar your home is to ones on the market or that have recently sold. Are the homes you're comparing of similar age and square footage? Are they close by? How many bedrooms and baths do they have? What size are the lots? Are the homes the same type as yours - single-family, townhome or condominium?
A CMA can give an up-to-the-minute look at similar homes that have recently sold or are currently on the market. But that's also why a CMA is useless almost as soon as its created -- the market changes constantly. All it takes is for one of the homes on your CMA to sell, drop in price, or be withdrawn from the market for the CMA to be out of date. Or, a new home can come on the market for a higher or lower price; that will also create the need for fresh information.
That's why agents can't guarantee that your home will sell for what you list it for, nor can they guarantee that a buyer will offer what you think your home is worth.
Every CMA is unique. Your agent inputs search perimeters into his or her multiple listing service database that are close to the size, location and features of your home. CMA software produces a report containing similar homes that have recently sold or are currently on the market.
Another agent can input similar search perimeters and come up with different results, by changing one or two search features.
There is much a CMA can't tell you about your competition -- whether a home backs up to a highway, whether it's in poor or good condition, and if it's been updated and how well. For those data, you have to go inside the homes and see for yourself which isn't always possible.
And that's where your agent can be invaluable. With his market knowledge, or her neighborhood expertise, your agent can give you the house-by-house intelligence that you need to make a better-informed decision in pricing your home for sale.
When your agent presents you with a CMA, ask questions. Why is this similar house more expensive than the one just like it? Why did this home sell in a few days while others languish on the market? Are homes selling for more or less than they were, and selling more quickly or slower than they were?
Ask to see the other homes for sale on the CMA, so you can see the competition's updates and floor-plans for yourself. That's when a CMA is most useful -- by helping you choose the right listing price for a quick sale.