A Fast and Easy Real Estate CMA Spreadsheet
Let's run through the basic steps of a real estate CMA, Comparative Market Analysis.
- You have a subject property with features and characteristics.
- You locate three excellent comparable properties & record details & sold prices.
- Adjustments to sold prices are made for differences with subject property.
- Market value of subject property calculated from adjusted sold comparable prices.
You're doing a CMA for one of two common reasons; either to determine a listing price or to check the current market value of a property they're considering buying.
Regardless of the reason, accuracy and a reasonable current market value should result from your calculations.
While it isn't rocket science, a trustworthy CMA requires that you select comparable properties carefully. They should be as close-by as possible, ideally in the same neighborhood. They should be current sales, best within the previous few weeks. They need to exhibit features and characteristics as close to those of your subject property as possible. Doing all of this well will normally result in a CMA you can rely on.
7 Common Elements in All CMAs
Let's look at this as a spreadsheet.
- In the first row are the addresses of the subject and comparable properties.
- The next four rows are where we enter information about the properties and their characteristics, including the sold prices of the comparables.
- We have a row to enter the square footage size of each home as well.
- The last column is where we enter adjustment values for lot size, bedrooms, baths and garage spaces.
- All rows below the "Sold Price" row are calculated by the sheet for you.
- The adjusted comparable sold prices are in the next to the last row, and they are broken down to dollars per square foot below that.
- The "Subject Value" is the calculated market value of the subject property arrived at by multiplying the average of the adjusted square footage sold dollars times the square footage of the subject property.
Determining Subject Value
Most of what you have to fill in is hard data about the properties. The only place where you have to interpret and get subjective is in the last column. There, we are assigning the value of each of the items for our comparable sold price adjustments. In other words, what's a bedroom worth if our comp property has more or fewer bedrooms than our subject property.
If it has more, then we must subtract some dollars from its sold price to adjust it downward to be more comparable to our subject property. Baths and garage spaces work the same. Baths can indicate half baths as the example shows, with the subject property having 2.5 baths. As a real estate professional, you can locate approximate values in dollars for each of these items either at online sites about remodeling or actually ask a local appraiser what values they use.
For a lot size adjustment, you need to try to come up with the approximate market value of a full acre of land. The sheet will use square footage, as most lots are less than an acre.
However, in the last column use the value of a full acre. For each property, use the lot size square footage. If one or more is larger than an acre, convert the acreage to square feet using 43,560 square feet per acre.
Do a CMA on Currently Listed Properties
This is meant to be a quick and reasonably accurate CMA calculation, and you're advised to do a second one using currently listed properties and their list prices. This way you can see if the market has changed and prices are higher or lower and make a judgment as to how to adjust your subject property market value.
This sheet only works with three properties, you can't use one or two comparables as the calculations will bomb. If you're good with spreadsheets and like to use more comps, you can add one or more columns just before the last one.
In fact, you can create several sheets with more or fewer comparable properties.