What is a
CMA?
When preparing to sell your home you first need to determine a value. This is done using a Comparative Market Analysis, or "CMA".
Before listing your home for sale you need to determine your market price range, which is why you need a CMA. Pricing your home right is shown to bring you the top value in the quickest time. Overpricing will limit your online views and number of showings, as well as push buyers to other properties at market value. Pricing too low can have a few outcomes; 1. Multiple offers to drive up the price, or 2. You sell for less than market, or 3. Buyers assume there is something wrong with the home and pass by it.
A CMA, or Comparative Market Analysis, consists of comparable homes that are currently listed for sale, currently listed as pending, and have recently sold. Withdrawn or expired listings may be included but are not as relevant to your sales price. However, withdrawn or expired listings are good examples of the effect of overpricing the home.
When reviewing comparable homes it’s always important to keep in mind the comparable home’s square footage, age of construction, upgrades, amenities, and condition of the interior, exterior, structural, and mechanical aspects of the property. Location is also considered when comparing properties. A home on a busy intersection will usually sell for less than the home in the same neighborhood/area that is tucked away on a quiet, less trafficked street.
Active listings are similar homes that are currently for sale in your neighborhood or surrounding area. These homes will be your competition. You want to list your home at a price that will attract buyers from your competition, while still taking into account the comparative features of your home. (The listing price of neighborhood homes does not necessarily reflect their sales price, but it’s an average base price point for determining the list price of your home.)
Option pending and pending listings are homes that were active but have recently accepted an offer and are under a signed contract. Pending listing have yet to go to closing and are still subject to the contract. The offer price of the agreed to contract is not necessarily reflective of the list price and could be a higher or lower amount.
Sold listings are homes that were sold no later than six months prior to the date your CMA was prepared. The sold prices may not be directly reflective of the list price but is usually fairly similar. Although the list price and sales price are usually different, the sales price data will give you an idea of what comparable homes in the same market area are actually selling for.
After a contract is agreed to an appraiser will be scheduled to come to your home, analyze your property, and give a value for your home. They will use a CMA to determine the appraisal value of your home. I will provide comparables to better inform the appraiser of the surrounding market. The appraiser may use the provided comparables alone or along with additional comparables of their choice.
An appraiser will take into consideration the square footage, location, amenities, upgrades, views, scenery, number of bathrooms, bedrooms, curb appeal, and other features of your home and the comparable homes. However, for this occasion we will not dig too far into appraisals.
We use the comparative market analysis to determine the best price to list your home and to begin marketing. Together we will be strategic and aggressive with marketing, which is why an eye catching price point is so crucial. The ultimate goal is to reach as many buyers as possible and get your home sold fairly and quickly with little to no negotiations against the price to earn you the highest amount possible in your time frame.