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What Does a CMA Do for You?

Posted by Emma Parker on January 20, 2022

When you think about what your home is worth, where do you go to find that information? Your mortgage company? Zillow? The opinions of friends & family? While all of these may hold some truth, the most accurate & updated source to find this information is a CMA. So what does a CMA do for you?

What is a CMA?

First & foremost, this is going to be a bit of a dry blog post, but just as important! A CMA is a tool that Realtors use to accurately depict your home’s fair market value. It compares your home with other recently sold homes, of comparative size, contents, & location to determine the value of your home in your local market. A CMA takes into account your location, square footage, beds & baths, lot size, acreage, & other value-adding aspects of your home. The value of your home is then adjusted based on the similarities & differences in value to other comparable homes that have sold.

The final product of a CMA is low, median, average & high price values for your home based on the comparable properties. This range is where the current market value of your home lies. Your Realtor will then take into account the current market trends to create a listing strategy. They’ll use their expertise & market insights to determine a listing price from there.

Why Can’t I Go Off of My ‘Zestimate’?

It’s hard to miss your ‘Zestimate’ whenever you go on Zillow, or any home search platform for that matter. Unfortunately, this number is not always accurate – here’s why:

Zillow’s database is only as accurate as the listings that are reported on their platform. They don’t take into account off-market listings, expireds, foreclosed or market listings that did not list on Zillow. Therefore, their ‘Zestimate’ only uses the sales of properties its aware of to generate your ‘Zestimate’. This also means that Zillow is only using the information that was uploaded, which could be inaccurate or outdated.

The MLS, or multiple listing service, that Realtors use, is the most accurate & updated resource for the home sales in your state. CMAs are run through the MLS, so they know the information is correct!

What’s the Difference Between my Replacement Cost & Market Value?

Your insurance company may give you what the cost to replace your home would be in the event of a catastrophe. Don’t get this confused with what your home is worth. Taken from CoreLogic, the replacement cost is taking into account the cost to construct the entire building including labor, materials, overhead, profit & fees. Your market value is driven by your local market sales in homes similar to yours. The replacement cost does not take into account the land, or any accessory buildings or structures either. Even though your replacement cost number may seem more appealing, it’s not a consideration when accurately pricing your home.

All Roads Lead From CMAs

So your CMA will tell you the low, median, average & high market values for your home. Where do you go from here? Well, you & your Realtor will discuss these numbers, the local market trends, & listing strategy. From there you will come to an agreement on listing price. Depending on how your market is moving, you may want to list lower than the average to attract more buyers. Or, if your property is unique or rare, you may want to list closer to the average. Whatever the case, your Realtor will price your home with your best interests in mind.

The other important aspect of having a CMA done is for appraisal purposes. The appraisal is a step in the home selling process where an unbiased appraiser looks at your home & compares it to other recently sold homes in the area. Sound familiar? The appraiser will then determine what they feel is the fair market value of your home. That number should be at, or above the purchase price, but not below. If it’s below, it’s a problem & can ultimately cost your the sale of your home.

The Value of a CMA for Buyers

CMAs can be super valuable for buyers too! When clients come to me with interest in a property, I’ll run a CMA for it to determine if it was priced to reflect the market. Why? Because just like for sellers, buyers will have to worry about an appraisal as well. I want to make sure that my clients are not offering over market value for potential homes.

They’re also a great tool to determine what the market is doing in their areas of interest! You can see market differences by comparing the recently solds in different towns & counties. Days on market, seller credits, & other info can give us hints as to what winning offers look like. So not only are CMAs a necessary tool for sellers, they’re also a helpful tool for buyers too!

CMAs: The Key to Help You Get the Key(s)

What does a CMA do for you? Well, as a seller, it allows your Realtor to accurately price your home for sale. It ensures that we are selling your home at fair market value. For buyers, it ensures that your offer price is within the fair market value range for that area. It also gives us insight into the local market!

Even though it may seem easier to click on Zillow’s ‘Zestimate’ or log into your mortgage portal to determine your home’s worth, it’s not accurate. Take the time to work with a Realtor to determine your home’s value based on their expertise in the local market. Accurately pricing your home from the start will save you time, headaches & money.


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