WHAT IS COMPARATIVE MARKET ANALYSIS?
Setting a correct price for your home is a huge determining factor in the length of time it takes to sell. If it’s priced too low, you will lose money on your investment. If it’s priced too high, it can take too long to sell.
Comparative market analysis (CMA) is a tool for arriving at a correct price. Realtors compile it based on recent sales, active listings, and expired listings in your area.
FACTORS TO CONSIDER
While other homes may be similar to yours, they are not usually identical. For example, one home may be exactly like yours, except that it has less square footage. Another home may have almost exactly the same square footage, but have one more bathroom than yours. There are a number of factors that will influence your selling price, such as:
- Upgrades. A swimming pool, an extra bathroom, or needed repairs can all influence the way your home compares with others.
- Location. If your home is on a busy street, and especially if it’s located near railroad tracks or a power plant, this will affect your sales price.
- Square footage. Realtors will compare your home with others that have similar square footage in order to determine a correct price.
- Age of Home. In the central Ohio area, there are some homes that were constructed in the 1950s or earlier. These homes have character and can command a higher selling price. But if you have a similar home that was built in the 1970s, that may not be true.
This is only a partial list of the many circumstances that may influence your listing price.
For example, recently median-income buyers in central Ohio have been in fierce competition because the number of middle-class homes offered for sale are not enough to meet the demand. If you are selling such a home in this market, you will need a professional to help you navigate a correct price. Always seek the help of a real estate agent in preparing your CMA. He or she will be able to price your property correctly, saving you time, money, and hassle.
Don’t underestimate the importance of a professionally-prepared, thorough CMA. Selling a home is one of the biggest decisions you will ever make. Make sure that you start out on the right foot by achieving stress-free and accurate pricing.