Eclectic Homes

Real Estate Market Analysis Defined

A real estate professional usually prepares a comparative market analysis (CMA) prior to a customer buys or sells a house. The report summarizes the estimated value of a property based on its characteristics and the conditions in the region’s housing market. Buyers and sellers can use the report to judge whether a home’s sale price is fair.

Source

After analyzing your property for dimensions and features, a property agent generally gathers the information for a market evaluation report from the multiple listing service (MLS), a local database which includes information about property previously or presently listed for sale with a real estate brokerage and information recorded in local public records.

Comps

The actual estate agent runs a market evaluation report looking at similar homes in the area–referred to as comps, or comparables–which matches the home in query against similar homes in its own area. Typical items examined include square footage, year built, number of bedrooms and baths, and yard dimensions.

Comprehensive Report

A complete market analysis report should compare the house in question against similar information in the MLS for active listings (homes currently available ), pending listings (homes which have a contract for sale but have not closed and changed possession ), closed listings (homes that have closed in the previous six to 12 weeks ) and expired listings (properties where a record agreement for sale expired before the customer’s home sold).

Variables

Although similar in age, square footage and arrangement, other variables that influence price and a home’s market desirability aren’t taken into account when the computer computes market value and should be calculated and adjusted between the actual estate professional and customer. Usually, the computer doesn’t account for updates in interior finishes, replacement of outside items such as siding, roofing and landscaping, newer garages and extras like finished patios and spa. A difference in price might not make sense on paper, however running a drive-by trip of comparable properties for a visual perspective can provide additional information and enlightenment on value and price beyond the report.

Warnings

A property market analysis is a rough estimate of a home’s fair market value and shouldn’t be substituted for an expert appraisal of value for sale or home improvement, or home inspection to identify defects and potential issues before purchasing a house.

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