Compartive Analysis to Determine Market Value
A good real estate agent will help you understand your market. The agent evaluates your home’s worth through a process known as a Comparative Marketing Analysis (CMA). Taking a look at your home’s assets, such as a finished basement, larger than normal living spaces, a fantastic view, adjacent parks, and neighborhood amenities, the agent compares your home with similar properties that have sold in the area within the last six months as well as those that are under contract and closing in the near future.
The agent makes adjustments up or down to the price according to factors such as square footage, acreage, age, and condition of your house. An experienced agent has the advantage of being familiar with the comparative properties and can make adjustments according to considerations such as the level of finish, such as the type of flooring, cabinets, and renovations, inside a home.
Market conditions impact the ideal price of property as well. Supply and demand dictate how quickly something will sell. If there is an abundance of comparable properties on the market in a given price range, a more aggressive pricing strategy is necessary for your property to gain notice. Thus, in addition to evaluating properties that have recently sold, your agent must also look at what is currently for sale in your price range.
The most accurate analyses are those in which the agent is able to compare 20 comparable properties within a one-mile radius of your home. Typically, this allows the agent to recommend a realistic price range that will ensure that you receive top dollar within a reasonable time.
Remember, although a real estate agent can advise you on your home’s fair market value price and can show you how that value was reached, the agent cannot set the price for you. It is your job to review the information from the agent and decide what price is right for you.
Karen