Just what is a CMA?

By Shawn Lackie

When someone decides to sell their home and chooses a Realtor to list their home, after some good research, there are a number of things to do, prior to showing the home to the public for consumption. Most of the work includes a mound of paperwork: yes, in a paperless environment.

One of the documents presented would be called a CMA. That’s short for Comparative Market Analysis, and that is what exactly? It’s a document which shows where your house would sit; compared to others currently listed; or those which have sold OR haven’t, due to overpricing; or for a variety of other reasons. The thing is, you want to position yourself in the best possible place to effect a sale which satisfies your client.

When the pandemic hit and people were spending like drunken sailors, CMAs were usually an afterthought. The seller would say, “This is what I want.” and a host of agents would just nod and agree because the spending spree was in full force. Then it wasn’t, and hasn’t been for four years, so agents actually have to step up and earn their commission.

A huge part of that is, establishing a price which makes sense to both buyer and seller. After all, that is the job of the Realtor. Find a deal which makes sense to both parties.

The biggest step is the first one. Enter the CMA. If the agent is doing their job, they will find comparative properties which have sold recently. Bungalows to bungalows, two-storeys to two-storeys and so on, in the direct area. With the number of sales which have happened in the last few years, that should be fairly easy.

Here’s where it gets funky. If something sold in 2020 for X amount of dollars, that really is NOT a comparable price in 2025. The market has softened considerably. There are three sets of numbers which must be looked at. Mean, Median and Mode. Mean is the average price for all the properties which have been sold in a certain area. Don’t be comparing a sold in Toronto with a sold in Whitby. The Median is the middle number between the highest sold and lowest sold. The Mode is the number most often seen.

This used to be easier because trends could be established and would carry for months, if not years: not anymore. Now, the agent really needs to go a lot deeper. They need to look at the benefits of the home, things internal, external or in the surrounding area. Internal, such as the number of bedrooms, baths, etc. External, like, is there a garage or not, or how much parking is there? Finally, regarding the area, how accessible is the home to parks, schools, shopping and transit.? You can find many direct comparisons. That is when you look at what the overall drop is, in average price. That needs to be configured into final list price.

The big thing I deal with, for clients, especially buyers, is the resale potential down the road. This can also be a huge selling point to buyers. If they know they are going to benefit in the long run they’ll seriously consider it.

Once all this data is rolled into a presentable document, it goes to seller and they can decide what next steps they want to take. The more finite the details, the better the chance things will end on a good note.

Feel free to check out this story and more on my blog site, at https://slackie14.wixsite.com/buy-sell-and-more