GET YOUR FREE CMA!! You see this headline all over Palm Springs local real estate websites, social media, and emails. FREE CMA!! So what IS “CMA”? A CMA is a “competitive market analysis” that compares properties using multiple factors, giving an accurate property valuation in the market at that point in time.
Real Estate professionals create CMA’s to analyze subject properties to similar properties currently listed and those recently sold. This will give the real estate agent a price range to give to their client.
While it may look like an appraisal, it is definitely not. A licensed real estate appraiser is the only one who can perform an appraisal but sometimes uses similar properties to compare.
Palm Springs area real estate agents not only use sold properties to come up with a listing price but current and pending listings are also calculated. Therefore, contingent listings are quite valuable in determining what the market is doing right now and the possible days on the market when listed.
CMA’s are time-sensitive and may change when other properties come on the market.
What goes into a Real Estate Agent’s Comparative Market Analysis?
An agent will look at the condition, location, square footage, lot size, age of the home, and the local market conditions.
Even though an appraiser will consider all this as well, licensed real estate agents who are not appraisers will only be able to draft CMA’s.
Agents who will perform a CMA for you will HAVE to visit your home. This not only helps your agent create your CMA, but it will also help when writing up their listing remarks.
What Goes into a CMA?
A CMA usually has three similar properties to compare with the subject home (your home); however, there could be many more comps listed to give an even tighter listing price for your home. Sales are usually no older than three to six months, especially in this hot market, but longer if comparables are harder to locate.
Because there has not been a lot of homes listed in the Palm Spring and La Quinta areas, an agent may have to go back twelves months or search a wider radius.
Only “arm length” transactions are used since a sale between families may have had concessions that don’t reflect the current home prices in the market.
Is it a good idea to get a “FREE” CMA? Yes! The real estate values have increased in Coachella Valley so much that home values have increased upwards of 30% – which means you may have more equity in your home. Unfortunately, this also means you may need to increase your insurance coverage to cover your replacement value. Once you have your free CMA in hand, please take it to your insurance agent for his opinion.
CMA’s do not last – appraisals do not last either. It’s just a snapshot of the market and your property on the date it was reviewed. It could change within a month to six weeks.
What CMA’s are not:
They are not Zillow, Trulia, what your uncle says your home is worth, or even REALTOR.com. Zillow and Trulia’s information is severely outdated. I saw one property showing “Active.” It closed twelve months earlier. I have seen REALTOR.com overprice properties to almost double what the house was really worth. It’s always heartbreaking to have to break that news.
Now is an excellent time to get your “FREE” CMA! So give me a call and let me help you with your real estate needs today!