This is a real-world example of how realtors / brokers / wholesalers / investors determine a property value. A student wanted to know how much this property worth is. So, we are using this real-world real estate Comparable Market Analysis CMA example today. Learn more here.
Step By Step Real World Comparable Market Analysis CMA
Let’s walk together through the process. A student sent a link of a property with a price of $125,000. Here is what a usually do from my computer:
1. Find basis information about the property
- First thing we do is searching for the address online. It is listed in several sites, meaning it is not good for wholesale.
- Zillow suggest a value of $177,000 based on a huge market area.
- HAR.com describes this as a 3bed, 2 and a half bath property with 1505 sq ft on a lot of 4,490sq ft. located in Tomball, TX. Subdivision is Westbourne. Built in 1994. Their value is almost $155,000
- Use google maps street view and take a virtual block around the street and the block to check the neighborhood or find oddities.
2. Leverage the power of aerial view
Use the aerial view to have a closer look into neighbor’ properties, conditions of lots around, value of homes nearby.
- In this case, the retainer pond found behind the property suggest many possible troubles like mod, mosquitoes, snakes, or water accumulation after rain.
- Also, we get to see the size and price of this property and compare it to the ones next door. This is a way smaller house with the same problem than the neighbors’ with not a big difference in prices. If you can get a bigger place in the same area for the same money, this means you can drop the price.
3. Comparing To Similar Properties Within The Zip Code
In this case, I’m running a search on HAR.com for homes of the same type sold in the same zone, listed from 0-100 days. Narrowed my results by using the corresponding subdivision and adding similar criteria to the property under study. Square footage is perfect to start. Checked the few closest properties and compare the features and value to the offer you have.
4. Create a Comparable Market Analysis CMA with any tool
This is an optional step. As I have access to all the tools HAR.com tools, I’ll use them to create a CMA with the more similar options I found in my previous research. Simply add all the information requested and generate a CMA. This will give you an idea of the right price, of how long does it take to be sold in that area and how close the price was to the accepted offer.