What is a Comparative Market Analysis Report in Real Estate on the Gold Coast?
A Comparative Market Analysis report (CMA) is an essential tool used in real estate to determine the market value of a property, relating to the sale or purchase of a home.
The report is compiled by a real estate agent and analyses homes that are similar in size, location, and features that have recently sold, are currently on the market, or were on the market but did not sell within a reasonable period.
This comparison allows sellers to understand the competitive pricing landscape, while buyers can ascertain the fair market value before making an offer.
The accuracy of a CMA hinges on the selection of comparable properties, or ‘comps’, which are identified based on a range of criteria including, but not limited to, geographical proximity, property size, age, condition, and the number of bedrooms and bathrooms.
Each of these factors influences the market value and helps establish a price range for the property in question. A thorough CMA reflects current market trends, taking into account fluctuations in supply and demand that may impact property prices.
Real estate agents utilise CMAs to guide their clients in making informed decisions when setting a listing price or constructing an offer on a property. This report is not an official appraisal performed by a licensed valuer, but it serves a complementary purpose.
It provides a foundation for negotiations and can significantly impact the financial outcomes for both buyers and sellers in the property market.
Unveiling Property Market Pricing on the Gold Coast in Queensland
Essentials of a Comparative Market Analysis Report
A Comparative Market Analysis (CMA) report is a crucial tool used in real estate to gauge the estimated market value of a property by comparing it to similar properties in the same area.
Definition and Purpose
In real estate, a Comparative Market Analysis report (CMA) assesses the market value of a property by comparing it with similar, recently sold properties in the same geographical location.
The core purpose of a CMA is to establish a fair market price for a home, often used by sellers to set their listing price or by buyers to confirm an offering price.
Key Components
- Comparable Properties
They identify properties that are similar in size, condition, location, and amenities. This data is often organised in a table format for clarity.
| Feature | Subject Property | Comparable 1 | Comparable 2 | Comparable 3 |
| Location | – | Similar | Similar | Similar |
| Size (sqm) | – | Close | Close | Close |
| Number of Rooms | – | Same | Same | Same |
| Amenities | – | Comparable | Comparable | Comparable |
| Sale Price | – | $$ | $$ | $$ |
- Adjustments
The report reflects adjustments made to the sale prices of comparable properties for differences in features and amenities. This ensures the comparison is fair and relevant. - Market Trends
Includes recent data on the trends in the local real estate market, which could affect property values. These trends may be reflected in rising or falling prices, increased buyer demand, or a decrease in the average number of days on market before a sale. - Final Market Pricing Range
Offers an estimated value range for the property based on the compiled data. It doesn’t provide a single-point value but rather a reasonable range reflecting current market conditions.
Conducting the Analysis
In a comparative market analysis report (CMA), real estate professionals evaluate a property’s value by examining similar, recently sold properties in the same area.
The validity of the CMA hinges on accurate data collection, thorough property comparison, and an understanding of current market trends.
Data Collection
The primary step in conducting a CMA is gathering data on comparable properties in the neighbourhood. Agents collect information such as sale price, property size, number of bedrooms, and amenities. This data often comes from:
- Real estate databases: Listings and sales records available to agents.
- Property inspections: On-site evaluations to assess conditions and features.
- Public records: Government sources providing details on previous sales.
Property Comparison
Once data is collected, agents scrutinise and match properties based on criteria that affect their market value. These may include:
- Location and accessibility
- Age and condition of the building
- Lot size
- Interior and exterior features
Each comparable property is adjusted for differences—adding or subtracting value—if it does not match the subject property exactly.
| Feature | Subject Property | Comparable 1 | Adjustment | Comparable 2 | Adjustment |
| Bedrooms | 3 | 4 | – Value | 2 | + Value |
| Bathrooms | 2 | 2 | — | 1 | + Value |
| Garage | Double | Single | + Value | Double | — |
Market Trends
Analysing market trends involves understanding the direction and speed of the market. Agents look at:
- Average time on market: How long listings stay active before selling.
- Sale to list price ratio: Percentage of listing price achieved in final sales.
- Economic indicators: Interest rates, employment stats, and population growth.
They interpret these indicators to predict if the market is trending towards buyers or sellers and adjust property value estimations accordingly.
Interpreting the Results
When assessing a Comparative Market Analysis (CMA) report, a real estate agent examines historical data and current market conditions to estimate a property’s value and strategise its pricing.
Market Value Estimation
A CMA provides an estimate of the subject property’s market value by comparing it to similar properties, commonly referred to as ‘comparables’ or ‘comps’.
These properties should have been sold recently, be geographically proximate, and resemble the subject property in characteristics such as size, condition, and features.
The real estate agent diligently reviews differences between the subject property and the comps to adjust the pricing accordingly. Factors considered may include location, amenities, and date of sale. Here’s an example adjustment table for various features:
| Feature | Comparable Property | Subject Property | Adjustment (+/-) |
| Number of Bedrooms | 3 | 4 | + |
| Renovation | Modern | Outdated | – |
| Land Size | 600 sqm | 750 sqm | + |
| Location | Standard | Prime | + |
Price Setting Strategy
Setting the listing price involves weighing the estimated value against market demand and supply dynamics. If the market analysis indicates a seller’s market, there may be room to set a higher listing price due to increased demand or a lack of available inventory.
Conversely, in a buyer’s market, a more competitive pricing strategy might be necessary. The agent considers these factors to determine the most effective listing price to attract prospective buyers while aiming to meet the seller’s expectations.
The pricing strategy must also consider the property’s unique selling points and any potential challenges. It may be presented as a range, allowing room for negotiation. For example:
- Suggested Price Range: $500,000 – $550,000
- Starting Listing Price: $525,000
- Expected Negotiation Margin: Up to 5%
Each price point corresponds with different market scenarios and is strategically chosen to balance attracting buyers and achieving the seller’s objectives.
Presentation and Use
A Comparative Market Analysis report (CMA) in real estate is meticulously structured and utilised to facilitate informed decision-making among stakeholders.
Report Structure
The typical structure of a CMA report includes several key components, each serving a specific purpose. Firstly, the Executive Summary presents the essence of the report, highlighting major findings such as price range and market trends.
A Comparative Section follows, listing similar properties that have sold recently, typically formatted in a table with columns for address, sale price, and relevant features. The Analysis Section then examines these comparisons to arrive at an estimated market value for the subject property.
Additionally, charts and graphs are commonly employed to visually summarise data, aiding in the report’s comprehension.
Stakeholder Communication
Effective communication with stakeholders is paramount when presenting a CMA report. Real estate agents typically share the document with property sellers or buyers to substantiate pricing recommendations or offers.
It must be presented clearly and professionally, often supported by a verbal summary to address questions and reinforce key points. Legal and financial advisors may also review the report, requiring that the data is accurate and the methods are transparent.
A CMA report serves as a fundamental tool in negotiations, as it provides a factual basis for discussing property value.
Limitations and Considerations
In preparing a Comparative Market Analysis report (CMA), one must be aware of factors that can affect its accuracy and relevance. The CMA’s value is only as reliable as the data it relies upon and market conditions at the time of analysis.
Market Variability
The real estate market is dynamic, experiencing frequent fluctuations due to economic factors, interest rates, and seasonal trends.
For instance, a house that’s appraised during a seller’s market may fetch a different value in a buyer’s market. Analysts are tasked with interpreting current trends and predicting future shifts, while also considering the potential for sudden market changes.
Data Accuracy
The validity of a CMA report hinges on the accuracy and timeliness of the data used. Property listings, recent sales records, and pending sales data must be scrutinised for errors.
The quality of public and proprietary databases can vary, which may impact the CMA’s outcome. Agents must verify information through multiple sources to ensure the highest level of precision.
THIS IS HOW YOUR JOURNEY TO A SUCCESSFUL GOLD COAST PROPERTY SALE STARTS
My simplified guide below will take you through a 20-step process for selling your property anywhere on the Gold Coast;
I proudly sell homes across the entire coast.
1. PREPARING YOUR GOLD COAST PROPERTY FOR SALE + SOME OF THE LEGAL REQUIREMENTS
- Tidying gardens and decluttering everything inside and out.
- All homes for sale, are legally required to have hardwired photoelectric, interconnected smoke alarms.
Non-removable 10-year battery smoke alarms can be installed as an alternative.
- By law, you are required to complete a pre-contractual seller’s disclosure statement: generally related to limitations, restraints, or defects in the property title, such as easements, covenants, leasing, zoning, etc.
- A pool safety certificate is also required if you have a swimming pool or if the property has a shared swimming pool (Body Corporate).
2. COMPARATIVE MARKET ANALYSIS REPORT FOR YOUR GOLD COAST PROPERTY
After showing me around your property, I will provide you with a Comparative Market Analysis (CMA) report. This is a detailed, legally required analysis of your home’s market value.
The CMA is based on recently sold and for-sale properties similar to yours in the immediate area. I will need to view your home to prepare this report.
3. SETTING A MARKETING BUDGET FOR YOUR GOLD COAST HOME
The third step in selling your home is to create a marketing budget.
By law, this must be based on actual costs.
There are various marketing options to consider, such as:
– Internal, External and Drone Photography.
– Property and House Plans show potential buyers the exact layout of your home and property.
– Internet Advertising on platforms such as RealEstate.com.au, Domain.com.au, Facebook.com, Instagram.com, etc.
– For Sale Sign on the street is still essential to attracting potential buyers. Even though many buyers start their search online, they often drive around neighbourhoods to see what’s available.
A simple fact: Not having a For Sale sign can significantly reduce the number of people who see your property and may be interested in buying it.
4. PREPARING AND APPROVING THE FORM 6 AGREEMENT WHEN SELLING A GOLD COAST PROPERTY
A Form 6 Agreement is a document provided by the Queensland State Government. It outlines all relevant details of the property sale, including the marketing budget.
Our administration team will prepare this form for you and send it for your review and approval.
5. PAYING THE MARKETING BUDGET FOR YOUR GOLD COAST PROPERTY
Once you have approved the Form 6 Agreement, the next step is to pay for the marketing budget that you have chosen.
6. STARTING THE ADVERTISING PROCESS
Once your payment is received, the advertising campaign will commence.
Advertising strategies will align with the choices you made within your marketing budget.
7. MONITORING MARKET RESPONSE
If your property hasn’t received offers within 30 days, don’t assume there’s no interest.
It often means the price isn’t aligned with what buyers are willing to pay at this time.
This is your signal to review and adjust your pricing strategy so your home remains competitive and receives the attention it deserves.
8. ARRANGING BUYER VIEWINGS
When buyers express interest in your property, viewings will be arranged to allow them to see your home in person; you need to be away from the property during these viewings.
This helps potential buyers feel relaxed and visualise themselves as the new owners, thereby forming a deeper connection with your property.
9. CONSIDERING A BUYER’S OFFER
When you receive an offer on your home, it means a buyer is serious and ready to move forward at a certain price.
This is a key moment in your selling journey. Take the time to go over the offer carefully.
Look beyond the price; check the terms, conditions, and settlement timeframes. Make sure it works for you before accepting, countering, or declining.
10. ACCEPT, COUNTER, REJECT
When an offer is presented, you will need to respond by accepting, countering, or rejecting it.
Accepting locks in the agreed-upon price and terms.
Countering proposes changes and initiates further negotiations. If countering, present revised terms clearly; open, respectful communication is key for a smooth sale.
Rejecting means the offer is unacceptable; in this case, respond promptly and professionally, explaining your reasoning for the decision.
11. YOUR LEGALITIES
When you finally accept an offer, you will engage your conveyancer or solicitor to facilitate the legal requirements to complete the sale.
If you are part of a Body Corporate, you will need to provide a Disclosure Statement from them.
Your solicitor will use PEXA to settle your property. Part of the process requires Verification of Identity. Also, anyone selling a property must complete an ATO Clearance Certificate.
12. BUYER’S DEPOSIT
The buyer’s deposit is a crucial step in the property purchase process; it will be held in the agency’s Trust account.
This is a tangible expression of the buyer’s commitment to purchase your property.
13. BUILDING AND PEST INSPECTIONS
Typically, a buyer will arrange for a building and pest inspection report to be completed, usually within 14 days of the contract date.
Additionally, they may have the contract subject to finance, which is generally applicable for 21 days from the contract date.
14. COMPLETING YOUR GOLD COAST PROPERTY SALE
Based on the outcome of the building and pest inspection report, as well as any finance being sought, the buyer will proceed with their offer or withdraw it.
At this point, the sale either falls through or becomes unconditional.
15. LOOKING FOR YOUR NEW PROPERTY
If the sale becomes unconditional, it is time to start looking for a new property. Remember, there is no need to rush.
It is essential that you take your time, as this needs to be a very considered purchase.
Your new home is of substantial value and can be costly if you change your mind. Something you may want to investigate is Short-Term Bridging Loans.
16. ALTERNATIVES YOU SHOULD CONSIDER
An alternative to seriously consider when deciding where to live between selling and buying is renting while you look for a new property.
Renting for a short period gives you breathing room; it allows you time to clear your head, make a confident, considered decision, and ultimately buy where you truly want to live, with no pressure or panic.
17. TIME FOR YOU TO MOVE
Leaving your home opens doors to a new chapter full of new beginnings. Embrace the excitement of a fresh start and cherish the memories you’ve made.
Every box you pack brings you one step closer to a new adventure full of possibilities that lie ahead.
18. YOUR SALE CONCLUDES
The culmination of the property sale is settlement; it marks the transfer of the property to the new buyer.
As the final chapter concludes, this marks a sense of achievement: your property has now SOLD.
19. YOUR FUTURE OPTIONS
If you have chosen to rent, you will continue to look for and eventually purchase a property, apartment, or perhaps even buy land and build; now there’s something to consider.
20. TIME TO UNWIND AND MAKE YOUR NEW HOME YOUR OWN
As you unpack and furnish your new home, embrace the gradual process of creating your haven.
Enjoy the transformation, one room at a time.
Relax in the tranquillity of your surroundings and immerse yourself in the gentle sounds of your new neighbourhood.
Explore the nearby parks and cafes; enjoy the unique charm of your new community.
Remember, settling in is a journey in itself; it’s not a race. Embrace the process of creating a home that reflects your unique style and personality.
Whether you’re downsizing, relocating or just ready to move on, I’ll guide you through every step of selling your Gold Coast home with confidence and ease.
Navigating the intricacies of selling your property can be complex, but it doesn’t have to be.
My 20-step guide provides a simplified general overview; as you would naturally expect, your steps may vary.
Author – Craig Douglas
Are you ready for a conversation about selling your Gold Coast home?
Let’s get you Selling
LET’S GET YOU SOLD
Craig Douglas 0418 189 963
Professional | Knowledgeable | Experienced
You can find me working at a Boutique Real Estate Agency
These are just some of the suburbs that I proudly sell homes in:
Upper Coomera
Please Note: The information contained in this document is for general information purposes only and does not constitute legal advice. The laws and regulations governing the sale of property in Queensland are complex and constantly changing. It is important to seek the advice of a qualified property lawyer or conveyancer before making any decisions about the sale of your property. This document does not take into account your individual circumstances and may not apply to your situation. By reading this document you agree that you have not relied on the information contained herein and that you will seek independent legal advice before taking any action.
This page was proudly created by Craig Douglas, your local independent Gold Coast real estate agent, working for a Boutique Real Estate Agency. Selling residential and commercial properties, from those that are awe-inspiring, through to a diamond-in-the-rough, otherwise known as a “renovator’s delight“.
I negotiate and sell on behalf of property owners who want to get the best possible price with the least amount of hassle. Let’s talk about the process of selling your property over a coffee to get you started – 0418 189 963
