Can A Comparative Market Analysis Help You?
Why A CMA is important to a homeowner.
Learn how a comparative market analysis can help you prepare to sell your home
What Is A Comparative Market Analysis
CMA's are an informal estimate of market value, based on sales of comparable properties in your area. It generally takes into account various aspects of your home, including size, lot size, home features, and annual costs. Reviewing comparable homes that have sold, expired, or terminated within the past 6 months, along with the listing or asking price on current homes for sale, should help you determine a fair sale price for your property.
CMA's can include homes that are currently for sale and those which have recently been sold. They can cover areas as narrow as one or two streets surrounding our home, or as broad as an entire neighbourhood. The same thing holds true for Condominiums in that you can have a narrow scope and compare same or similar units within your building, or as broad as comparing similar units in surrounding buildings.
The CMA is an informative tool, but like any tool, it doesn't work by itself. For this reason, the CMA will always need to be interpreted by a professional.
Remember, too, that a Comparative Market Analysis is also used as a buying tool. Real Estate professionals will typically share CMA reports with clients as they consider buying homes in an area or neighbourhood. Just as you can use the CMA to ask the highest possible price for your property, buyers can use it to determine if your property is being listed or negotiated at fair market value.
A CMA Contains Valuable Information On Several Recent Sales That May Include:
- How long each property stayed on the market
- Did they expire/terminate and then relist
- How close the sale price was to the listing price
- Notes comparing each home to your home
- Number of bedrooms and the size of each
- Number of bathrooms and their condition
- Approximate square feet
- Size of principal rooms
- Family room -- does the comparable home have one
- Finished basement
- Interior updates
- Exterior landscaping
- Age of the home
- Property taxes, and more.
Price It Right
When you're ready to sell, don't make the mistake of over-pricing your home, you could easily disappoint buyers who will compare your home to other homes within the same price range. Plus, you may eliminate a pool of potential buyers who are shopping for homes priced closer to your true market value -- causing you to lose buyers during the crucial first few days or weeks that your home is on the market. And the longer your home stays on the market, the more buyers may begin to reason that there is something wrong with the property.
Avoid a "price high then drop" strategy -- you run into the risk of buyers believing that the home has flaws, or that you are desperate to sell. If you accept a bid at an inflated price, your buyer may face financial problems, because an overpriced home will not necessarily appraise for the selling price.
It's good to hire a real estate appraiser for an unbiased estimate. Then consult with a real estate professional who can help you determine true market value based on a comparative market analysis. The key is to work with your real estate professional to price right and create a strategic marketing plan that creates excitement from the start.
Getting your home's value from a robot or an algorithm is fine until you need an accurate report... its kind of like searching for your symptoms on WebMD is fine until you actually need a doctor!
My custom reports include accurate and up to date information.