What is an NJ MLS Comparative Market Analysis?
What you need to know regarding CMA reports from the NJ MLS Search
When you are interviewing NJ Real Estate agents to potentially market your home, you will most likely be introduced to a document generated by the NJ MLS known as the comparative market analysis, or CMA. This priceless piece of information essentially shows homeowners in black and white what their competition really is. However, a Comparative Market Analysis can equally work for or against a homeowner. Both an owner and Realtor rely on the CMA, along with other tools, to determine where a home will stand in comparison to others which on the market and those which have recently sold in order to determine the highest possible asking price. The buyer will find this information useful prior to submitting their offer in an attempt to submit the lowest offer possible for the home.
See below for more information on CMA reports and how they relate to the NJ MLS:
What is a CMA report used for?
CMA's are about facts which can be qualified and quantified. Created in the NJ MLS, the CMA is typically designed to give quick bits of information about a home such as number of bedrooms and baths, approximate square footage, general room sizes, amenities such as pools and fireplaces, property taxes, age of the home, listing agent contact information, and more.
What is included in a CMA report?
Comparative Market Analyses can include homes that are currently available for sale as well as recent sales in the NJ MLS. They can be dated as far back as one week, one month, or one year. CMA's can cover areas of various sizes such as one or two streets surrounding the home, or as broad as an entire subdivision.
What is not included in an NJ MLS Comparative Market Analysis?
What are not included in the CMA are those factors that influence perception, and this is the primary distinction between why one home with identical features will ultimately command a higher price than its mirror image. Since opinions sometimes differ from reality, this is an essential consideration in understanding the process of buying and selling and the value of the CMA. Much of a home's value will be determined by the emotional impact it has on buyers. These emotions are based on subjective factors such as interior colors and décor, curb appeal, room flow, and window views among many others. In addition, for privacy reasons, the CMA that is given to homeowners does not show every piece of information that may be known to the NJ Real Estate agent. Along with an NJ MLS listing, it will provide the basics such as what, when, where, but it will not reveal who the seller is or why the home is for sale. The reasons for this are to protect the seller's privacy and to keep from inadvertently giving the buyer the upper hand in a distress situation.
What other information can be found in a CMA report?
In addition to current listings and recent sales, the listing agent will provide a brief statement at the end of a CMA report. This statement is usually a combination of fact and subjective opinion, and will generally include selling restrictions or selling points of the home. Examples of this can range from specific showing instructions of the home to descriptive features of the home such as when it was redone.
What other tools are necessary in the sale of a home?
Although a Comparative Market Analysis is undoubtedly a selling tool, it takes an educated and professional Realtor to be able to use it in the right manner. For this reason, the CMA will always need to be interpreted by a qualified agent or with complete objectivity by the seller or buyer. Keep in mind that the CMA can also be used as a buying tool because the information contained in it is equally as important to a buyer and his or her agent. As a seller and their agent are going to use the CMA to ask for the highest possible price for a home, the buyer is going to use it to find reasons to either choose or eliminate a home, and to determine the lowest offer price possible.
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.
