American consumers love to make comparisons. They want to know how much they weigh today compared to last week. They want to know about how the price of the jeans their daughter wants at one store is compared to other stores. They even want to know what the list price is for a car that they are looking at one lot in comparison to other lots in town. It should come as no surprise, then, that these consumers also want to be able to make comparisons when it comes to making the biggest financial investment in life: a home.
Comparative market analysis (CMA) is the tool that realtors use when they are helping their clients make decisions about both buying and selling. In fact, real estate CMA software is used in nearly every stage of the home buying and selling process. From making a decision about what the list price of a home should be when it goes on the market to deciding what to make as a counter offer if you are the buyer, real estate CMA software is an invaluable tool.
Even banks look at these “comps,” as they are called in the business, when determining whether or not they will approve a loan. Especially helpful to buyers who are coming from another part of the country, realtor CMA software provides a local indicator of the value of the housing market as a whole, as well as an individual property. It is difficult, for instance, to understand the value of a home in the midwest if you are moving from one of the coasts. Likewise, it is difficult to evaluate real estate prices on the coast if you have lived in the midwest your entire life.
Real Estate Investment Success Relies on Finding Homes with a Good Price
In addition to individual buyers wanting to know the value of a property that they are considering, it should come as no surprise that real estate investors also need this information. Did you know, for instance, that as many as 19% of all homes sold in 2016 were purchased for investment purposes? Given that the 2016 homeownership rate in the U.S. was the lowest it has been in 50 years, it should come as no surprise that there will continue to be a growing number of people who are interested in this investment opportunity. Every one of them will depend on the accuracy of a report generated by real estate CMA software.
