What is a Comparative Market Analysis?
Comparative Market Analysis is a statistical evaluation prepared by real estate professionals, aimed at determining the current market value of a real property by making comparison with recently disposed of real properties. This valuation technique can be utilized to ascertain the sales value of both residential and commercial real estate properties.
Often, compared real estate properties are not completely identical to the subject property. There may be disparities in features such as square feet, number of rooms, available facilities. In particular situations, the site of the compared properties could be material. In all these cases, real estate professionals will modify the differences between the already sold real properties and the subject property to figure out a fair value.
The use of a comparative market analysis plays to the advantages of both the seller and buyer in a real estate transaction. On the one hand, it ensures that the seller gets the best price the market has to offer on his real property. On the other hand, the buyer is guided in making an informed purchase by not paying more than the market worth of the real estate property.
Real estate owners would be best advised to consult professionals to undertake the analysis due to its technical nature.