subject: Understand The Cma Before Making An Offer To Miami Beach Foreclosures [print this page] There are three ways of buying Miami Beach foreclosures: pre-foreclosures, auctions, REO. Each has its own details and risks which are why you should determine on what stage of foreclosure are you most comfortable with. If you're thinking of making an offer on a pre-foreclosure property, make sure you get the market value first through careful analysis of the comps.
The CMA
Also known as Comparative Market Analysis, or just simply comps, CMA is a reliable method of getting the real value of the property. This is greatly useful for both sellers and buyers. In addition, the comps are also helpful in getting the fair market value of Miami Beach foreclosures.
The comps typically distill the Miami Beach foreclosures and other real estate properties into lot square footage, bathrooms, bedroom and others. These data are compared to other properties that have similar characteristics, specifically on homes that have recently sold.
What you should look at
Sold Price
Since you are buying a property, you should concentrate on the sold price instead of the list price. But you should also pay careful attention to the difference between the two. The list price will only provide you a good view of the asking price of home sellers. The sold price, on the other hand, is valuable and relevant information when buying a home.
Adjusted Average Sales Price
You can easily determine a baseline offer through three simple steps. First, take the highest and lowest sales prices of homes by disregarding extreme comparables. These comparables are homes that are excessively upgraded and tremendously more beautiful than the property you're about to purchase. Since you're likely to get a wider price range, you can narrow this down if you average the sales prices of properties comparable to yours. All you need is basic math; add the prices and divide the sum on the number of comparables used.
Lastly, you need to adjust the average sales price based on the comparison between the comparables and the property you're planning to buy. You can do so by considering several factors, including number of beds and baths, lot size, location, upgrades and features and age of the sales.
Similarity
Unfortunately, the average sales price wont matter much if the comparables are significantly different to the Miami Beach foreclosures youre planning to purchase. But even if the comps are diverse, there will still be a large chance that one property is largely similar to yours. This property will be helpful in predicting the market value of the home you're considering of buying, so be on the lookout of such a property.
