It’s a challenge figuring out how much a house is worth when a potential client asks an estate agent to evaluate their home. Many factors determine it, and at the end of the day, it is a subjective, informal market estimate.
But, pricing property is a science and is best determined through a real estate comparative market analysis (CMA).
Table of contents:
- What is a comparative market analysis (CMA)?
- How to do a real estate comparative market analysis
- Determine which resources to use for research
- Gather and organize property data on a spreadsheet
- Record all data about the property
- Compile comparable data and properties
- Calculate an estimated price using comparable sales
- Example: Calculating the estimated value using comparable sales
- Prepare a final CMA for the potential client
- Example: CMA spreadsheet template
- Schedule an appointment to review the CMA report
- When to use a CMA real estate report
- Automate your CMA real estate report
What Is a Comparative Market Analysis (CMA)?
A comparative market analysis is a tool real estate professionals use to estimate a property’s value.
A home comparative market analysis is usually conducted by evaluating similar houses sold within the local market data.
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When preparing a real estate market analysis, factors that impact the sale price typically include the square footage, location, number of bedrooms, and number of bathrooms.
But, more importantly, it depends on the property’s condition, age, features, and market conditions, among other things.
An accurate real estate CMA report can be used to make competitive real estate market analyses that help sellers to set listing prices that influence buyers to make fair price offers.
How to Do a Real Estate Comparative Market Analysis
When learning how to create a CMA report, it’s important to remember that it is not solely for the agent, and it’s meant to help clients understand the market and make the right decisions for their property.
In addition, CMAs also help to nurture and convert potential leads that result in more real estate deals.
1. Determine Which Resources to Use For Research
An agent must provide clear evidence about their home’s valuation to gain a potential client’s trust.
To do this, the estate agent needs to use the correct tools to gather and compile data that make sense to potential clients.
Some great options include AVM, Cloud CMA, Zillow, Local MLS, HouseCanary, and Google Street View.
2. Gather and Organize Property Data on a Spreadsheet
If the agent used many tools to gather data, the information would likely be jumbled on multiple documents and platforms.
The property data and calculations should be transferred into an organized document or spreadsheet to make the information easier for the client to understand.
3. Record All Data About the Property
It’s essential to gain the most up-to-date property information.
The best way to do this is by visiting the property in person and speaking with the homeowner.
Record all information about the property, including the number of bedrooms and bathrooms, age and type of property, square footage, and parking.
All hidden issues and features affecting the sales price should also be recorded.
In addition, ask the homeowners about dates of past renovations, taxes, average utility prices, and homeowners’ association (HOA) fees.
Other key factors to consider while touring a property include:
- The condition of the home.
- Any additions and upgrades.
- Necessary upgrades.
- Aspects of the exterior and landscaping that either increase or decrease the home’s value.
- Any amenities or special features that add value to the property.
4. Compile Comparable Data and Properties
Now it’s time to find a collection of similar properties to compare, evaluate, and compile the real estate CMA from the current market. Comparable properties should be similar in these ways:
- Location and neighborhood
- Age of property
- Listing age
- Square footage
- Exterior and landscaping
- Condition of property
- Building type
- Layout
- Bedrooms
- Bathrooms
- Lot size
- Amenities
- Recent renovations or updates
5. Calculate an Estimated Price Using Comparable Sales
After collecting five to seven comparable properties, the next step is calculating each home’s price per square foot.
Agents typically use simple equations to calculate the average price per square foot for each comparable property to calculate an estimated cost for the subject property.
To determine the average cost per square foot of each comparable listing, the agent should divide the square feet of each house by their respective sales prices.
Then, to find the average price per square foot, add up each comparable home’s price per square foot and divide this by the total number of comparables.
Lastly, multiply the subject listing’s square footage by the average price per square foot of comparable properties to determine the subject property’s approximate value.
Example: Calculating Estimated Value Using Comparable Sales
Assume you are pricing a 2,000 sq ft home and have identified five comparable properties that recently sold in the same neighborhood:
| Comparable Property | Sale Price | Square Footage | Price per Sq Ft |
| Comp #1 | $420,000 | 2,100 sq ft | $200 |
| Comp #2 | $395,000 | 1,900 sq ft | $208 |
| Comp #3 | $410,000 | 2,050 sq ft | $200 |
| Comp #4 | $405,000 | 2,000 sq ft | $203 |
| Comp #5 | $390,000 | 1,950 sq ft | $200 |
To calculate the estimated value:
- Calculate the price per square foot for each comparable by dividing the sale price by the square footage.
- Square feet of house ÷ sales prices = average cost per square foot
- Find the average price per square foot:
- ($200 + $208 + $200 + $203 + $200) ÷ 5 = $202 per sq ft
- Apply the average to the subject property:
- 2,000 sq ft × $202 = $404,000 estimated value
Based on this data, the subject property’s estimated market value would fall around $400,000–$410,000, allowing the agent to recommend a competitive and realistic listing price.
6. Prepare Final CMA for the Potential Client
Now it’s time to finalize the data by creating a CMA package. A basic spreadsheet with property details might not always make sense to clients, so it’s essential to design a CMA report that includes key takeaways and descriptions.
It should also highlight the critical information and be put into a scannable format that won’t confuse the seller.
Example: CMA Spreadsheet Template
Copy and paste these into your spreadsheet, or use our CMA spreadsheet template.
Tab 1: Subject Property Overview
| Field | Details |
| Property Address | 123 Main Street |
| Property Type | Single-Family Home |
| Square Footage | 2,000 sq ft |
| Bedrooms | 3 |
| Bathrooms | 2 |
| Lot Size | 7,500 sq ft |
| Year Built | 2005 |
| Condition | Good |
| Notable Upgrades | Updated kitchen, new roof (2021) |
| Recommended Price Range | $395,000 – $415,000 |
Tab 2: Comparable Properties
| Address | Sale Price | Sq Ft | Price / Sq Ft | Beds | Baths | Year Built | Condition | Days on Market |
| 456 Oak St | $420,000 | 2,100 | $200 | 3 | 2 | 2006 | Good | 18 |
| 789 Pine Ave | $395,000 | 1,900 | $208 | 3 | 2 | 2004 | Avg | 22 |
| 321 Maple Dr | $410,000 | 2,050 | $200 | 4 | 2 | 2005 | Good | 15 |
| 654 Elm Ct | $405,000 | 2,000 | $203 | 3 | 2 | 2003 | Good | 19 |
| 987 Birch Ln | $390,000 | 1,950 | $200 | 3 | 2 | 2005 | Avg | 25 |
Tab 3: Pricing Summary
| Metric | Value |
| Average Price per Sq Ft | $202 |
| Subject Property Sq Ft | 2,000 |
| Estimated Market Value | $404,000 |
| Suggested List Price | $399,000 – $409,000 |
Tab 4: Agent Notes & Strategy
| Category | Notes |
| Market Conditions | Moderate demand, low inventory |
| Pricing Strategy | List slightly below market to drive competition |
| Seller Recommendations | Minor cosmetic updates before listing |
| Agent Commentary | Homes priced within range sold within 21 days |
7. Schedule an Appointment to Review the CMA Real Estate Report
Many homeowners begin by requesting a home value estimate online. While that initial number sparks interest, it rarely tells the full story. Meeting potential clients is a great way to stand out to new leads, and it also allows the agent to be top of mind if the client sees many agents.
Spend time with a homeowner to review the report. The market analysis might be complex for the homeowner to understand, so having an agent walk them through it is a great way to convert them into clients and build a long-term relationship.
What’s the difference between a CMA and Appraisals?
The main difference between a home appraisal and a CMA is that a licensed appraiser carries out an appraisal on behalf of the bank. The bank usually orders a home’s appraisal when a buyer applies for a loan to purchase the property.
There are two ways to find the value of one’s property: a comparative market analysis and a formal appraisal. While they may share similarities, there are critical differences in how these two approaches arrive at a listing price for a property.
A CMA is a property valuation carried out by real estate agents to estimate the value of a home. CMAs provide a range of value that helps sellers set an asking price for their properties.
A CMA will compare similar homes within the same area that have either been sold or are currently on the market in the past three to six months.
An appraiser may use similar payment methods to an estate agent but has no interest in selling a home. The appraiser visits the property to ensure that the property has a fair market value and that the mortgage lender is not giving out more money than the property is worth.
When to Use a CMA Real Estate Report
CMAs are primarily used to evaluate a property’s value before it is on the market.
If an agent has been hired as a listing agent, they must create a free, comparative market analysis report to help them determine the appropriate listing price for their property.
Aside from sellers, a real estate CMA can also be created for:
- FSBO (For sale by owner) home sellers. A CMA will show FSBO homeowners that they will make more money through an estate agent than on their own.
- Landlords. Real estate investors want to know the value of their rental properties before they list them for sale.
- Homebuyers. Knowing the values of similar properties in the area helps buyers determine if a home is a good deal and allows them to submit a competitive offer.
- Commercial properties. Just as CMA reports are essential for residential properties, they are necessary for retail buyers and sellers to understand the value of similar properties.
Seller Landing Pages: Automate CMA Reports Straight to Your Client’s Inbox
Creating a CMA report manually can be time-consuming, especially when every minute counts in landing new listings. That’s where seller landing pages come in, an automated way to send professional, data-driven home valuation reports directly to a potential seller’s inbox.
With Home Value Leads, you can capture homeowners actively searching for an estimate of their property’s value. Instead of spending hours compiling a CMA, you’ll automatically deliver a home valuation report to sellers, putting you in front of motivated leads faster and ahead of competing agents still building their reports.
These instant, automated valuation pages not only save time but also position you as the first point of contact for homeowners ready to sell. The result? More qualified leads, faster responses, and a stronger competitive edge in your local market.
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