A Comparative Market Analysis (CMA) assists a seller in comparing his or her property with others in the marketplace in order to establish a listing price. A CMA typically includes properties that are currently for sale, properties that have recently sold, and properties that did not sell in a defined time period. This information can provide a seller with an indication of what buyers are prepared to pay for a property given current market conditions. A CMA is a valuable property evaluation tool for real estate professionals when advising sellers about current market conditions and a recommended sale price.
In Ontario, a comparative market analysis is also referred to as a Residential Market Comparison. There is a specific form that Realtors can use to complete the CMA. However, many Realtors commonly use automated CMA’s that are driven by local Multiple Listing Services®. The range of information on automated CMA’s varies but can include such features as available comparable properties in the defined trade area, sale specifics within the defined area, mapping information, analysis of key characteristics for comparable properties (including exterior photos), neighbourhood price trends, selected demographics and assessment information.
Both sellers and buyers can benefit from having a CMA prepared for a property. As the seller is entitled to the salesperson’s professional opinion regarding property value and listing price, a comparative market analysis (CMA) is usually prepared for that purpose. Buyer representatives often also prepare a comprehensive CMA of the subject property.
There are also other valuable tools that Realtors have access to that can help in the preparation of a CMA, or that can be used in conjunction with the CMA to provide guidance on the market value of a property. A Propertyline Comparable Report can be prepared through the Municipal Property Assessment Corporation (MPAC), which includes information on private sales, assessed values, neighbourhood profiles, and demographic data. In addition, by accessing the Ontario Land Registry, Realtors can also prepare a GeoWarehouse Comparable Sales Report that provides sales and demographic data, as well as additional information such as: area sales heat maps, growth rate heat maps, market turnover heat maps and historical market trends.
A CMA is a useful start for buyers or sellers as it provides a wealth of information; however, in today’s market it is also important for your Realtor to consult other innovative databases. This will ensure that you are provided with the best information when trying to determine the optimal buying or selling price of a property.