For most people their home is their most valuable asset and the sale of a home is usually the largest single financial transaction that most people undertake in their lifetime! When it comes time to sell – they will have two competing factors: Emotions and Reality. As cold as it may sound, we need to choose Reality. When considering the market value of a home, we must confront the following circumstances that we have no ability to change:
Physical Qualities (of the real estate)
- Size of house and lot
- Interest rates and financing availability
- Buyer demand
- Prices of recently sold properties
- Economic conditions nationwide and locally
- Seasonal demand
- The number of similar properties for sale
- Their prices, financing terms, locations and physical condition
Factors that have ‘no bearing’ on Market Value of real estate
- The amount of cash you want or need from the sale
- What people say your property is worth
- Your motivation and urgency to sell
The most effective way to get TOP DOLLAR for your home is with the help of a professional trained to work with the ever-changing real estate market conditions. Those market conditions and data are combined with your specific goals to complete a customized marketing plan and a realistic time-frame is established for the completion of the sale. One of the most effective tools used in pricing real estate is the Competitive Market Analysis.
What is a Competitive Market Analysis?
A Competitive Market Analysis (CMA) will help you determine what the buyer should be willing to pay for your property, based upon past sales and present competition. A CMA analyzes the market, the economy and the competition. The seller and the broker review the information available, and price the property competitively. It is the agents’ role to educate the seller and execute an effective marketing program. It is the seller’s role to price their property and prepare it for the market.
The following items are taken into account when completing a CMA:
- Square Footage
- Number of Bedrooms
- Number of Baths
- Lot Size
- Analysis of the Economy
- Analysis of the Competition (currently on the market)
When you choose a listing price, be able to justify your decision. If a buyer agrees to your price and the appraiser disagrees, we’ll have to try to defend our position. That is why pricing is so critical. A competent REALTOR® will present information, discuss options and strategies, and assist in creation of a marketing program.
A Market Analysis is NOT an Appraisal. A CMA may or may not agree with an appraisal. An appraisal for a specific reason, i.e. refinance, divorce, probate is based primarily upon brick, mortar and statistics.