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CMA Stands for Comparative Market Analysis. If done correctly the RealtorŪ will use three to five properties. The properties should have sold within the past six months and never more than a year ago. These properties should be located close to the subject property and all should be as identical to the subject property as possible. The following calculations should help you understand the process.
 
Subject | Property-1 Property-2 Property-3
Street Number 123 | 137 156 129
Location Main Street | Main Street Oak Street Elm Street
Year built 1985

|

 1984 1991 1983
Date Sold   | 1-month ago 3-months ago 6-months ago
Sales price   |  $                  202,000  $                  225,000  $                  194,500
Square feet              1,750 |              1,720              1,950              1,700
  |      
Bedrooms 3 | 3 4 3
Baths 2 | 2 2.5 2
Garage 2 car-Attached | 1 car-Attached 2-car carport 1 car-attached
Lot size 75x90 | 85x100 80x95 75x95
Lot Square Footage                          6,750 |                          8,500                          7,600                          7,125
Last years taxes   | 1,800 1,675 1,450
Homesteaded Yes | Yes Yes Yes
  |      
Value differences:   |      
Garage   |                          5,000                          5,000                          5,000
Half Bath   |                               -                          (2,500)                               -  
Adjustments   |                          5,000                          2,500                          5,000
Revised sales price   |                      207,000                      227,500                      199,500
  |      
Inflations 1.5% month   |                      207,311                      228,524                      217,455
Current sq ft value of comps   |  $                    120.53  $                    117.19  $                    127.91
  |      
Value of subject based on sq ft   |  $                  210,926  $                  205,085  $                  223,851
 
Note how Elm Street sticks out as the exception. All of our houses are old enough to be dated by colors (i.e. pink and blue bathrooms). We need to understand why Elm Street sticks out. Perhaps the baths and kitchen have been updated in this property. Our three sources of information are the listing agent, the selling agent and the appraiser. Most sellers will only see the $223,851 price and list for $229,900. The subject house may not attract offers and days on the market will become its enemy. Assume a buyer offered full price with a minimum down payment, its doubtful the property will appraise and the offer will be renegotiated. When you see an exception like this don't accept it at face value. Elm Street may have had 2-3 buyers bid the price up.
 
I would recommend a listing price between $215,000 and $219,900. The subject property should sell between $207,000 and $210,000. When a house is priced correctly it may draw more than one offer and the final sales price may be bid above the asking price. When a property is over priced this seldom happens because buyers look at what other properties in the same price range offer. A buyer that has looked at 3-5 properties can tell when a property is over priced. Market value means your property is fairly priced to attract an informed buyer.
 
Your Realtor's job is to get you the highest price possible. To fairly price your property they use comparable sales that make sense. I would call to find out why Elm Street received a higher price and it's possible I would substitute another property that more closely resembles the subject property. In any event the recommended listing price and the estimated selling price are the absolute tops in each category if the seller is serious about selling and wants to receive any offers.