What is a CMA that Sacramento Realtors Use?
Sacramento home sellers and Sacramento home buyers should know what a CMA is and why your Sacramento Realtor should ALWAYS run a CMA for you whether you are selling a home or buying a house.
CMA stands for Comparative Market Analysis which is an analysis of the price point in an area. This really means that the homes that are similar are compared to each other within a 1-mile square radius of the house that will either be for sale or that you want to buy. On rare occasions, we will pull homes further than a mile if there are no comparable homes that have sold close to the house in question.
What does similarity in homes mean?
- Year built
- Number of bedrooms, baths
- Square Footage
- Single story versus 2 story
Adjustments for 2 car versus 3 car garages, in-ground pools versus no pool, permitted upgrades versus none are also made to a CMA.
Once similar homes are found then we as Sacramento Realtor® will list the Active homes for sale and Active Contingency homes since these are the homes in the neighborhood who are competing with your home for sale or the home you want to place an offer on. Taking a good look at the Active homes for sale will give the Sacramento home seller the edge when deciding on a competitive asking price for their home for sale. Sometimes, especially in this current real estate market, a neighborhood may be going up or going down from the recent solds.
Also, whether or not home for sale is an REO (bank-owned home), Regular home sale or Short Sale is separated in order to see what the current real estate market in that neighborhood is all about.
We also include the homes in Pending Sale which show you the homes that were reasonably priced and in the condition that a home buyer wanted to purchase. Of course, the Pending Sale homes do not show what the buyer offered nor what the seller has accepted but it does show what the last listed price for the sale was. These are the homes that are moving on the real estate market.
Days on the market will also be part of the CMA which will show all the days on the market no matter how many different times the house may have been listed as well as a reduction in price versus the original listing price. This is why Sacramento home sellers want to make sure they are listed correctly the first time!
Next, will be the SOLD homes. The sold homes will show you which homes sold in the past 3 months (we use to go back 6 months) and the amount they sold for in order to be properly informed as to the appraised amount for a similar home in the neighborhood. Sold prices are the most important price point that both a Sacramento home seller and Sacramento home buyer should be weighing.
Next are the expired homes. Now, you might be asking yourself why would I care about the expired homes for sale? Expired homes for sale will show both the Sacramento home seller and the Sacramento home buyer the sellers who were priced incorrectly and failed to attract a home buyer. Many times, it was the price of the house that was not realistic and sometimes it was the condition of the house that did not attract a home buyer.
Absorption Rate is another factor that needs to be addressed for getting a true picture of the neighborhood. This figure will show how many homes are on the real estate market for sale and how long it will take before receiving offers based on the solds.
Sometimes, it’s a good thing for Sacramento home sellers to visit their competition of Active Sacramento homes for sale in order to compare the homes listed for sale on the real estate market. What does your home have that the other home may or may not have? It helps to get a better perspective on what the Sacramento home buyers are viewing and how they compare your home for sale. The Sacramento home seller may even want to spruce things up a bit once they see what their competition looks like.