You’re called out of an investment committee meeting at your real estate company for an important phone call. Stepping back into the meeting you find you’ve missed the initial description of the Subject Property, but a heated debate on which Comparable Properties should be used to evaluate the property is underway. Glancing at a handout your analysts have prepared, you see observe the following table: Comp A Comp B Comp C Comp D Comp E Distance from Subject 0.50 Miles 0.75 miles 1 mile 0.25 miles 0.90 miles Year of Construction 1990 2005 1985 2015 2006 Sq. Ft. 14,000 SF 24,000 SF 10,000 SF 25,000 SF 37,000 SF Months Since Sale 3 months 9 months 12 months 4 months 2 months
You’re called out of an investment committee meeting at your real estate company for an important phone call. Stepping back into the meeting you find you’ve missed the initial description of the Subject Property, but a heated debate on which Comparable Properties should be used to evaluate the property is underway.
Glancing at a handout your analysts have prepared, you see observe the following table:
|
|
Comp A |
Comp B |
Comp C |
Comp D |
Comp E |
|
Distance from Subject |
0.50 Miles |
0.75 miles |
1 mile |
0.25 miles |
0.90 miles |
|
Year of Construction |
1990 |
2005 |
1985 |
2015 |
2006 |
|
Sq. Ft. |
14,000 SF |
24,000 SF |
10,000 SF |
25,000 SF |
37,000 SF |
|
Months Since Sale |
3 months |
9 months |
12 months |
4 months |
2 months |
![Q5(a). Your four partners each have a different opinion as to which
TWO comparable properties are the best fit for your analysis. Based
on each of their selections, which criteria of comparability is each
partner giving the greatest weight:
Partner
Tom
Donna
Ron
Ann
Tom
Donna
Ron
Ann
Selected Comps
Comp B & Comp D
Comp A & Comp E
Comp D & Comp A
Comp B & Comp E
[Choose ]
[Choose ]
[Choose ]
[Choose ]
Property Type
Market Conditions
Age and Condition
Net Operating Income
Size
Locale](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7038cbde-5259-4f1b-ade8-fa8f6320a6eb%2Fd3101bc8-0d4d-493b-9a66-700a38969bc8%2Fi0ow42_processed.png&w=3840&q=75)
Comparative Market Analysis (CMA) is a process in which real estate agents search of homes in similar areas and then based on various factors categorize them and analyze their pricing.
Some of the factors which are considered are:
- Market conditions: Taking projects or properties which are sold very close in time It is usually a span of 3 months because the pricing might change rapidly in just few months.
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