Comparable Sales

Comparable sales represents sales for a given period compared to sales for the same period in the previous years. In order to determine your offer price of a property you first look at the recent sales in the area that are similar in comparison to the one you are interested in purchasing. Start by analyzing the data, the condition of the home, what improvements have been made and the current market conditions.  The most accessible source of information on comparable sales is the public record. When someone buys a home the property is deeded from the seller to the buyer. Your Realtor can generally look up this information through their local Multiple Listing Service (MLS) and provide the information to you by way of a Comparative Market Analysis (CMA).

When you prepare an offer to purchase a home, you already know the seller’s asking price. But what price are you going to offer and how do you come up with that figure depends on your negotiating style, adjust your "fair" price and come up with what you want to put in your offer.

A CMA is usually prepared by real estate agents who are looking to determine potential sales price for a properties on the open market, this information will help buyers decide on an offer price. The  information about homes currently for sale helps agents gauge the pricing position of competing properties and once analyzed, this gives the agent a picture of the local marketplace.

The agent’s experience in the business and familiarity with the local area can affect the accuracy of the CMA. However, a CMA prepared by an experienced agent with good knowledge of the local marketplace is usually right in line with the appraised value.  A CMA can therefore be a very useful tool no matter if you are the buyer or seller in the real estate transaction.

Please keep in mind that a CMA is not a property appraisal.  A real estate appraisal is a very comprehensive evaluation performed by an independent professional  real estate appraiser that involves additional data and process.