Thursday, April 25, 2019 / by Connie Tracy
Before putting a home on the market or listing it with a real estate agent, home sellers should get a comparative market analysis, also known as a CMA. This is a free report to tell you how much your home is worth. But before you obtain the CMA, the agent should really come to your house and do a quick walkthrough to see what condition your home is in and any upgrades you may have done. Besides, we want to see what you love so much about your home and find out your long range goals.
The CMA is a report that is put together by looking at a variety of criteria in order to price your home at a fair market value. These reports vary for a two-page list of comparative sales to a 50-page comprehensive guide. Whether it is the 2 page or the 50 page report, it should include the following:
Active Listings: These are homes currently for sale. These listings matter only to the extent that they are your competition for buyers. These homes are not a representation of market value since sellers can ask whatever they want for their home. Of course, this doesn't mean the prices are realistic. The offered sales prices do not reflect market value until they sell, and in a seller's market, like we are in, most sell for more, depending on the condition of the home and location.
Pending Listings: These are homes that are under contract. They haven't closed yet, so they aren't a comparable sale. Generally, you are not going to know the actual sold price until the transaction closes. Pending sales DO indicate the direction the market is moving. If your home is priced above the list price of these pending sales, you may face longer DOM (days on market).
Sold Listings: Homes that have closed within the past three to six months are your comparable sales. These are the sales an appraiser will use when appraising your home for the buyer, along with the pending sales. Make sure you look closely at the comparable sales because those are your market value.
Comparable sales are those that most closely resemble your home. It is difficult to compare a tri-level home to a single-story home. Homes that are used are generally identical to your home size, shape, and condition, such as the following:
Similar square footage
Similar age of construction
Similar upgrades and condition