What Exactly is a CMA (Comparative Market Analysis) and what does it mean for a Buyer?
A CMA or Comparative Market Analysis is an in depth property analysis that helps determine a property's value. CMA's are performed by a real estate agent not an appraiser. Savvy Buyers know that requesting a CMA especially during a buyers market could lead to the best investment they ever make.
What information can be expected when you receive a CMA? A good CMA includes all of the following: types of properties: Rambler vs Two story, multi level etc. Square footage, size of lot and types of up grades. A good Agent uses all of this information to determine a value on the property and a good place to start on a price. Buyers can use that information to their greatest benefit?
Active Listings - An active listing is simply a home that is currently on the market for sale. An active listing does not necessarily determine property values. A neighbor can list their home at whatever price they want, it may never sell but it is still an active listing. With this understanding active listings should be viewed as a benchmark. In a buyer's market like Utah is currently experiencing most homes will sell for less than the listed price.
Pending Listings - A pending listing is a home that is under contract but has not closed escrow. Pending listings do not help determine property values unless you know the purchase price. Once the pending listing closes, it becomes a sold listing.
Sold Listings - Sold listings are comparable homes that have closed with in the last year. This is what an appraiser uses in an appraisal. Therefore, sold listings determine the market value. With this information buyers will be able to negotiate the best deal possible.
Currently America is experiencing a buyer’s market. Home values have not dropped this drastically since the early 1900's. This should not instill fear in buyers, instead it should instill excitement. The real estate market will rebound and if you buy a home now it will probably be the best investment you ever make. Yes, it is a long term investment. This is a once in a life time opportunity do not miss it because you listen to all the pundits and talking heads about how bad it is out there. Therefore get excited, stop listening to all the bad news and remember that, this is the greatest most prosperous country, this is America. Just make sure to do your research, have a CMA performed and negotiate the best deal possible. In five to ten years you will look back and realize that by doing the opposite of everybody else you capitalized on one of the greatest opportunities of your lifetime.
Utah's Real Estate Market is no exception. Values in coveted Park City, Utah are extremely attractive right at the moment. For those who do not know of Park City, it consists primarily of upper end properties and similar to Vail Colorado. It is also the host to the annual sundance film festival.
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ABOUT THE AUTHOR
Ron Thurber with Keller Williams of Utah, Real Estate Agent with over 11 years experienceUtah Buyers CMA