If you’re ready to sell your home, it might be time to get down to the business of pricing. So, what is a comparative market analysis and how can it help?
A comparative market analysis is a tool that real estate agents use to determine an asking price for your home. When you receive a CMA, it will be a thick physical (or digital) packet with facts, charts, figures, and photographs of properties comparable to yours that have been active or sold recently.
It weaves together key pieces of information on local trends and the sale price of comparable properties to offer a complete overview of all of the factors that can impact your home’s value. Here are 4 ways you can expect a CMA to help you in the selling process!
It puts your home in a wider context
You likely know all of the ins and outs of your home – from the door that doesn’t shut quite right to the sunroom that’s the highlight of the property. But even with this familiarity, you might have trouble pricing your home.
Your home’s value is interconnected with its surroundings and the state of the market. Mortgage rates, housing inventory levels, and other factors will influence what a buyer can and is willing to pay. To narrow down a price, you need to put your house in the perspective of a larger market, and a comparative market analysis is designed to do just that.
The CMA will include a list of comparable sales (also known as comps). These are comparable, nearby properties that are active, pending, or recently sold. They offer a point of reference as to what your own house is worth. Each comp will have key information about the details of the home, like the number of beds & baths, square footage, amenities, and more. Details such as median listing price in the area, average days on the market, months of inventory, and average price per square foot may be added to the report. Using these comps, the agent will be able to determine a price range for the property.
Presents all of the facts & data
A home can carry a huge emotional weight, and it can be hard to separate your own opinion from the reality of the market value. When you’re thinking about the sentimental value your home holds, you might be blinded by memories and pride for the home you have taken great care of.
A study from HomeLight revealed that 52% of top real estate agents cite the temptation to overprice as the biggest challenge sellers face. So, when you decide to part with a home you love, it’s important to go with your CMA and not your gut.
This same rule applies when you’re selling a property that you may not be partial to. It may be tempting to sell a property quickly if you’re not attached to it, but a CMA can help you understand & command a fair price for the property.
It accounts for all of the things an appraisal or web estimate cannot account for
A real estate agent can fine-tune an estimate of what your home is worth. This is essential for the task of pricing your home for the market. Knowledge about the area, insights into buyer trends, and a deep evaluation of the home’s condition & features give your real estate agent a leg up on any web estimate tool you can use.
If you’ve been diligent about keeping your home fresh over the years while taking care of regular maintenance, you’ll want to be sure you’re not underselling the property. But, it’s important to remember that you may not recoup your investments dollar-for-dollar. An agent will be able to determine how much value to add for updates like flooring, cabinets & countertops, and remodeled bathrooms.
The pandemic has caused a lot of people to re-evaluate their priorities at home. Today, buyers might be more willing to pay for features like outdoor living spaces and a dedicated home office. Fast-moving trends like these are much more likely to be accounted for through a CMA than through an online estimator tool.
According to the Top Agent Insights for Spring 2021 from HomeLight, real estate agents estimate that homes with pools are now worth 69% more than they were prior to COVID, with backyard swimming holes adding over $27,000 in additional home value today. A digital property valuation tool will have a hard time factoring in the attractive factors that are currently shaping property values.
It can give you accuracy without the costs of an appraisal
To obtain an appraisal, you’d need to hire a professional appraiser to evaluate the home & provide a report for you. Any lender financing a home will require an appraisal before closing. While they are generally trusted for their accuracy, they can cost an average of $500.
An appraisal isn’t always necessary to gauge price unless you have a particularly unique property or if your agent is struggling to find comps.
Helps you arrive at a fair price for your home
With the help of a real estate agent, you can avoid overpricing (or underpricing) your property. A CMA takes into account the broader market and the fine details that make your home special.
Are you ready to get started in the selling process? Team Melton has over 50 combined years of real estate experience to assist you through every step of the process. Contact us today to get started on selling your home!