Understanding the NJ MLS Comparative Market Analysis

How to read a Comparative Market Analysis from the NJ MLS

Prior to putting a home on the market or listing with a NJ Real Estate agent, knowledgeable home sellers obtain comparative market analyses, also referred to in the industry as CMA’s. Sellers use a CMA to figure out home pricing, and buyers find CMA’s useful when placing offers on homes to gage how much they should spend. Although reports can range in length, from a four-page list of comparable home sales to a 40-page comprehensive guide, the length and involvedness of the report is dependent on how it is prepared by the individual agent in the NJ MLS.

Nonetheless, a standard comparative market analysis report typically contains the following data:

Active listings

Active listings are homes currently on the market in the NJ MLS. These listings are relevant solely because they are your competition for buyers, and are not indicative of market value as sellers can theoretically price their home for whatever they like. List prices may not necessarily be realistic, and do not reflect market value until they sell, and in buyer's markets, for example, most sell for a lot less.

Under contract listings

Pending sales are homes that are under contract and have not yet closed in the NJ MLS. Therefore, they are not considered a comparable sale unless the listing agent discloses information such as the sale price. In fact, it is not legal to do so in NJ Real Estate. In any event, pending sales do indicate the direction the market is moving. If your home is priced above the list price of these pending sales, you could face longer days on market.

Expired listings

This group of listings reflects the highest median sales price due to the fact that they did not sell and were most likely unreasonably priced. Some of these listings also show up as active listings shortly after they expire, this time with a new price and a new Realtor. Listings can also expire because they were not aggressively marketed or because the home was in need of repairs.

Sold listings

Homes that have closed within the past six months are regarded comparable sales in the NJ MLS Comparative Market Analysis. These are the sales in which an appraiser will use when appraising your home for the buyer, in addition to the pending sales which will likely have closed by the time your home is sold. You will want to pay particular attention to these comparable sales as they are your best indicators of market value.

Withdrawn or off-market listings

These are properties that were taken off the market for a number of reasons, most commonly because they were priced too high. The median prices of these types of listings will almost always be higher than the median prices of comparable sales. In addition, homeowners can cancel listings for other reasons such as too long on the market, irreparable items or simply because the homeowner fired the Realtor.

Comparable sales

Comparable sales are those that most closely resemble your home. It is complicated to compare a tri-level home to a single-story home. Homes that share similar characteristics to yours such as square footage, age of construction, number of bedrooms, location, and amenities or upgrades like a pool will be considered for the Comparative Market Analysis when generated in the NJ MLS.

 

The Real Estate market is changing rapidly and expanding into new avenues almost daily. Sometimes it can be very difficult to find the answers you need on a specific topic or issue. In times like these, you need a Real Estate professional who will provide valuable information and trustworthy advice. For more information on NJ Real Estate, call us today or click here to be connected with one of our top Real Estate specialists.