Comparative Market Analysis

Comparative Market Analysis:

Pricing your home correctly is an important part of the sales preparation effort. An over-priced home will sit on the market longer, and the initial interest momentum may be lost. Consequently the price of the home may need to be lowered to get a sale. But when a home is priced "right" from the start, the home will sell quicker and often for more since there is interest momentum. On the other hand, an under-priced home may sell quickly but you may not get the best price.

The Comparative Market Analysis (CMA) report is prepared by an agent and gives an estimate of the current market value of your home. This analysis looks at properties that are similar or comparable to your home and takes into account all of the variables that may affect the value and marketability of your home. A CMA is the best way to determine a reasonable asking price for your home.

An appraisal is not the same as a Market Analysis:

An appraisal is a certified appraiser's estimate of a property's value at a given point in time. To make their determination, appraisers consider square footage, design, floor plan, construction quality, neighborhood, availability of transportation, shopping, and schools. An appraisal is not the same as a Market Analysis and should not be used as one. Frequently we will find that a Market Analysis is in conflict with a recent appraisal of the same home. There is good reason for this. An appraiser will place a value on the property based on the particular reason it was ordered. If it appraised for insurance reasons, the home will be valued at it's replacement cost regardless of its condition or location. Thus a home that would sell for $750,000 might have a replacement value of $820,000. Also, a homeowner who recently refinanced his home may have had an appraisal that inflated his home's value to allow him to borrow more money against its equity. A comparative market analysis can be a better indication of what a buyer will pay for your home because this analysis is based on current market conditions and comparable sales in your neighborhood. Properties located in close proximity to your home that have similar characteristics, such as lot size, square footage, number of bedrooms, baths, etc., are researched. Since the goal is to obtain a balanced view of the market, we look at similar homes that fall into four basic groups:

How comparable properties are selected:

Currently listed homes will identify the competition

Recently sold homes indicate what buyers are willing to pay

Pending sales will give us an idea of the demand for this type of home

Expired listings of homes that fail to sell suggest what buyers will not pay

We evaluate the amenities your home has to offer, factor in information about current market conditions and arrive at the price which should attract buyers, allow you to earn as much money as possible, and help you to sell as quickly as possible.