CMA: Comparative Market Analysis
Comparative Market Analysis
Understanding The Value of Your Home
How Does a Seller Know the Real Market Value of Their Home?
Some Sellers rely on the City of Calgary Assessed Value when it comes to selling their home. And when it comes time to sell their home they expect their REALTOR® to use this assessed value for the List Price. The sellers expectations have been set not by market value but by a City assessment. If you've recently seen your City Assessment come in the mail, please read on.
Take a look at this example:
Two homes (Home A & Home B) on the same street were built by the same builder in 1992 and are identical in many key respects including: square footage, number of bedrooms, number of bathrooms, both have finished basements, both have double attached garages, they are the same lot size, both are fenced, and both have similar location and views. The City of Calgary would have both of these properties for the same value, for example $450,000.
However, when a REALTOR® views the two homes and conducts a CMA (Comparative Market Analysis) the home values are significantly different than the City's assessed value. Why is this?
- Home A: Has been rented for the past 20 years, over 15 tenants! The home is in its original state. In other words we have the original flooring (carpets and lino), kitchen, appliances, same paint work, blinds, same deck, roof, window frames/doors, and furnace. No renovations have been done on the home. Its looks worn out and ready for a major renovation.The REALTOR® CMA List Price comes in at $430,000.
- Home B: Has the original owner still living there. The home has been totally updated and renovated: hardwood and tile flooring, new kitchen: with granite and new cabinets, new high end appliances, well painted home (inside and out), expensive blinds/drapes, new deck (maintenance free), new window frames/doors, new roof, new furnace, landscaped gardens. The home is in top notch condition, ready for selling. The REALTOR® CMA List Price comes in at $490,000.
Notice a REALTOR® CMA can show a market difference of $60,000 between the two homes, while the city assessment shows the same (and misleading) $450,000 value for both homes!
A second effect or delay, is the City assessment timing. It's out of date when you get it!
An assessor reviews and measures the real estate market on July 01, 2011 to establish typical market rates. Your property assessment is based on the real estate conditions as of July 1 of the previous year and the physical characteristics and condition of your property as of December 31 of the previous year. This again skews the value of your home, since homes could have changed in price: for example, they may have increased by $10,000 since the City did the assessment.
A CMA conducted by a REALTOR® is for homes sold in the past 1 to 3 months on your street and community, not the previous year. The CMA reviews the condition of your home today and takes into account the improvements or lack of them.
So sellers, when you come to sell your home please look at the REALTOR® CMA as the major influence in choosing a List Price. Be very careful of using the City assessed value that was conducted last year. The assessed value is really meant to establish your taxes: it does not look at specific homes and what the seller has done with the property over the past 20 years.Thinking of Selling Your Calgary Home in the next few months?
Call Geoff and Matt Antrum to conduct a REALTOR® CMA
We are qualified to conduct professional Comparative Market Analysis on homes that have sold in your community and on your street that take into account your home's particular renovations and upgrades.