Comparative Market Analysis (CMA) Sells Your Home
As soon as you start trying to sell your home, you will be introduced the comparative market analysis (CMA). Comparative market analysis will give you an idea about the trend of market prices. Selling does not happen in a vacuum so it is important to understand the competition and how you can competitively position your home on the real estate market. If you are not using the comparative market analysis as a tool for selling your home then you need to be.
What Is A Comparative Market Analysis?
“Comparative market analysis is an in-depth price understanding of homes that are similar to your home and have been sold in the last three to six months”
It is the first assignment that should be done if you hire a home selling agent . This analysis should be a regular part of the services that are provided to the seller. A successful comparative market analysis brings an accurate price range for a seller to sell home. The time taken for selling a home depends on which end of the price range the seller chooses for the asking price.
Top Reasons a Comparative Market Analysis Will Sell Your Home
Comparative Market Analysis is considered the most important tool that can help selling a home at perfect price. There are a number of reasons that a CMA will help selling your home. Some of the main reason are given here:
1-Provides market insight so you can respond to offers intelligently
Today’s market is continuing the pas year’s shift toward seller. The inventory is shrinking as investors are holding their properties and lending practices are still tight due to the housing bubble burst. Selling a properly priced home in these circumstances definitely will invite a bidding war, so you should have a better understanding of price trend before responding to an offer.
Your home selling agent will include listings that are active on the market. It is to keep in mind that these prices may not be market indicative prices as they may be a wishful thinking, but it will help you getting an idea that what kind of prices you are competing with. Expired listings and homes that don’t sell in the listing agreement time, should serve as a warning to you. Most of these sellers didn’t take comparative market analysis seriously. They priced outside the market and so did not receive offers within their expectations.
2. Price your home to sell as fast or slow as you want
After market comparative analysis, your home selling agent will include the upper and lower price limits that he determined. These limits are set based on the analysis of sold listings that resembles your home, location, size and the understanding of an agent of the real estate market. If you choose an asking price on the high end of the CMA’s price range, you may have to wait longer to sell your home, but if you select lower end then you will be able sell your home quickly. This is an ideal situation for sellers that are in a hurry to sell their homes, especially if you are in the midst of a seller’s market.
There may be fewer bidders, but they will be serious bidders. If you are like most other sellers, then you must be trying to sell your home faster than slower. Choosing the lower prices will help selling your home as quickly as possible. More buyers will look at and consider your home because they will see it as a better option and a bargain as compared to the other similar homes. Keep in mind that an overpriced home, if an offer is accepted, will not appraise and therefore won’t sell. You don’t want to happen that to you so you need understand the CMA and it helps getting a better price.
3. Understand buyer behavior in the current real estate market
A CMA will tell you about the behavior of buyer. If buyer is interested in driving up prices or is practically non-existent, comparative market analysis will tell you about it. Every home that is listed in the CMA should show the number of days on the market (DOM) and how long the home has been or was on the market. The lower number of days on the market is better in most of the cases. However, if a home sells very quickly, it means that the home was priced very low.
A CMA will include the asking price and final sale price of the sold homes. Comparing these prices, you will come to know that how interested buyers are actually purchasing as well as how much they are willing to pay. This is crucial information for you as you decide where to price your home. You will have to struggle to gain buyer’s attention if they are not driving prices up and even you may feel that lower price is necessary to sell your home. A home that is over prices will have fewer bids and maximum chances of being expired, and a re-listed home is much difficult to sell. Any agent can see what transpired and it inspires questions of problems with the home or property. The risk of under-pricing is obvious: losing money.