Comparable Market Analysis

Have you ever been curious how professionals value a real estate investment? Many real estate investors, agents and buyers/sellers utilize an exercise called the Comparable Market Analysis to mathematically estimate the value of a property. As a first step, the investor finds out the price per square foot of comparable properties which have recently been sold or put on the market. The second step of the CMA requires the investor to adjust the price per square foot of the comparables to account for any unique features of the property he or she is looking to value. After the adjustment has been made, all the investor needs to do is multiple the calculated price per square foot by the property size to come up with the estimated value of the property.