If you're thinking about selling your home or property, a comparative market analysis or CMA is a great way to help you determine the actual value of your home.
You could conduct your own comparative market analysis, but it's best to seek the assistance of a trained real estate professional. Real estate professionals have access to up-to-date geographic-related information about:
- Active, pending and expired real estate listings
- Comparable home sales
- Market trends including the average number of days area homes remain on the market before they are sold
- An area's recent highest, lowest and average home sales prices
When you enlist a real estate agent to provide you with a CMA, you are likely to get more complete information faster. An agent will also help you to analyze the information in a comparative market analysis. A CMA is in no way a price guarantee. There are many factors that go into pricing a home and some of them are very personal including a seller's motivation. Some sellers are financially distressed, or are under pressure to relocate for employment purposes and are willing to drop the price of a home for a quick sale. Other sellers are willing to wait for the right buyer to purchase his or her home at a premium price.
The depth of comparative market analysis reports varies. Ask your real estate agent to explain what you can expect to learn from the CMA he or she provides. At the very least, a standard CMA will include:
Active listings or homes currently for sale. This will give you a snapshot of homes your potential buyers will be viewing and comparing to yours. A seller can list a home at any sales price, so be careful not to read too much into active listings. In the end, a home is worth what a buyer is willing to pay.
Pending listings. A pending listing is a home under contract. This means the sale has not yet closed. Like sold listings, pending listings can help you determine what buyers are willing to pay for property comparable to yours. Because pending sales are still in the legal negotiation process, this information is often kept private.
Sold listings. Appraisers are strongly influenced by the price at which comparable homes have sold in the same geographic area as your home. An estimated market value will be largely based on sold listings.
Withdrawn or canceled listings. Sellers sometimes withdraw their homes from the market and the reasons vary. A change in life circumstances, low offers, and repairs required for buyer financing are just a few. This information can, however, be very helpful in determining how high is too high.
Expired listings. An expired listing is one that has been on the market beyond the length of a realtor contract. Sometimes these properties are overpriced. Sometimes they are not marketed aggressively. Occasionally a seller will change agents in the middle of the sales process.
It is very important to only compare properties that are similar to yours in a comparative market analysis. In some locations, this will be hard to do. Important comparables include:
- Square footage
- Type and age of construction
- Amenities and upgrades
Of all of these factors, you have the most influence over condition and amenities and upgrades. A thorough comparative market analysis or CMA will help you determine whether or not repairs and upgrades will significantly increase the value of your home. It's best to seek a CMA before spending too much money on repairs and remodeling.
Call us today for your comparative market analysis or CMA. We're here to help you price your home right.