Understanding the value of your home is critical to your success in selling the property. If you price it too low, buyers will wonder what’s wrong with it. Price your home too high and buyers won’t even bother looking at the photos.
Setting a fair asking price starts with a Comparative Market Analysis, or a CMA for short. A CMA provided by an experienced agent that knows what they are doing is therefore critical. We’ll take you through the key factors that help ensure you get a great CMA so you can set yourself up for success when it comes time to sell.
What factors does a CMA consider?
A CMA compares your home’s features to recently sold homes in the area, also called “comps”. At a minimum the comps should be:
- Within a quarter mile of your property
- Within 200 square feet of your homes’ square footage
- Have been sold within the last 6 months, ideally within 3 months
- The final sales prices of the comps, not the listing price
To break it down further, ideal comps will also:
- Have the same number of bathrooms as your property
- Have the same number of bedrooms as your property
- Have similar features and upgrades as your property
- Be located in the same school district
- Be located in the same zip code
But this is just the start of a good CMA and where an agent’s experience really starts to shine. All homes are unique and it takes a trained eye to find the best comps. Some real estate markets also move slower than others and this causes many instances where ideal comps are not available.
An agent that knows every street, has a wide network of local contacts and their own expertise will be able to fill in the gaps where direct data is not available.
How many comps should a CMA include?
A good CMA will be based on a minimum of 3 comps, and include up to 10 if the market data is available. The more data and experience an agent can draw on the better.
What about online home valuation tools?
Technology is great, but it has limitations. Automated tools can provide you with a starting point if you just want a rough estimate of your home’s value – The Pamela Walters Group has one available here for you to try out. But home sellers should be cautious in using these tools when it comes to actually setting a price for their home.
More specifically, automated home valuation tools face these challenges:
- The data is limited to what’s publicly available
- Detailed data (like specific features and upgrades) is not all standardized/formatted in a way these tools can understand and is not considered
- The reliance on an algorithm (a mathematical equation) that doesn’t always account for quickly changing market dynamics
This is where the Realtors at The Pamela Walters Group can help. You’ll get a CMA that combines truly local experience, years of real estate expertise, access to a wide network of contacts, and the most realistic comps to help you price your home right the first time.
Contact Us today to see what your home is worth.