Why no two CMAs are alike
Whether you’re a buyer or seller, your agent will give you a market snapshot known as the comparative market analysis (CMA). Comparisons are based on similar homes within a given search area, using size, age, features, condition, location, whether the homes have sold recently and which are currently on the market.
Buyers use CMAs to help them make offers while sellers use CMAs to help them price their homes for sale or to adjust the price. As soon as a home sells or a new home comes on the market, the previous CMA is no longer relevant and your agent can generate a new one for you.
Prices may vary widely, even between identical homes. One property may simply offer better drive-up appeal or more extensive updates. CMAs differ widely by search perimeters like number of bedrooms, views, swimming pools, or a broader search area.
There’s always going to be a home that sold for an astronomical figure, or the one that sold for pennies on the dollar, so you might throw out the highest and lowest priced homes because there’s no knowing why a seller undersells or a buyer overpays. Family pressures, corporate relocations, and other reasons won’t be in the CMA.
Consider how quickly homes are selling, whether they sold for list price or above, or if homes are experiencing price reductions. Your agent will explain how home sales are trending and what strategies may work best for you to get the home you want.
How CMAs and Appraisals Differ
Establishing a home’s market sales price is equally important to buyers, sellers, lenders and real estate professionals. To help transactions proceed quickly and efficiently, sales professionals and appraisers both utilize information from the local Multiple Listing Service (MLS).
The MLS is a professional member-based cooperative that contains a wealth of information including active listings, homes that have recently sold, tax roll data, historical data, and market trends such as how quickly homes are selling and how close they sell to the original listing prices.
Using this data, licensed real estate professionals prepare a comparative market analysis (CMA) reports to help sellers choose a listing price for their homes and to help buyers make offers. The CMA is a consumer-facing report that includes recently sold homes and homes for sale that are most similar to the seller’s home in location, appearance, features, and general price range.
If the buyer is receiving financing through a bank, the bank will order an appraisal, using the same MLS data, but with some differences. A bank appraisal is performed by a licensed appraiser to determine market value. Comparable homes similar to those in a CMA are used to compare physical features, property tax records and recent solds to determine whether values are trending up or down.
In short, the CMA introduces consumers to the ever-changing marketplace of homes for sale and those properties that have recently sold. The appraisal determines market value for the bank so that the bank doesn’t lend too much money on a single property. Together, CMAs and appraisals help consumers buy and sell homes.
Four Ways to Price your Home to Sell
Is your home really worth your asking price? The best way to answer that question is to consider the same criteria that homebuyers do: market conditions, location, condition and price.
Market conditions: Smart buyers hire a real estate professional to help them navigate market conditions—whether their city, neighborhood and price range is in a buyer’s market or a seller’s market and what strategies to employ to get the best home possible for their money. The greater the inventory, the more room buyers have to negotiate.
Location: Buyers narrow their searches to neighborhoods within their price ranges. They look at your home and its competitors and choose the one they perceive to be the best value.
Condition: Your competition is not only other similar homes in your area, but what buyers could get if they purchased brand-new. Your buyer is comparing size, number of bedrooms and baths, amenities, updates, views, landscaping and décor. The closer you can put your home to move-in readiness, the higher the price buyers will pay.
Price: Price your home to get immediate and serious offers. You can’t put a price on everything, but many features such as fine workmanship, room flow and convenient storage are simply worth more to buyers. A buyer may compromise on a neighborhood, or they may pick a home in less than perfect condition, but only if the price is right.
Trust your Berkshire Hathaway HomeServices professional to show you how to make your home the best choice in any market.
The Art of Pricing
The majority of showings by sales associates on a new listing occur when the house is first placed on the market. Sales agents arrange for their active, qualified buyers to see a home when it is newly listed. Once this group has seen the property, showing activity decreases to only those buyers new to the market. It is extremely important to position your home at the best price during its first market exposure as overpricing will have negative effects on time and selling price!
Quick tips for selling quickly
Patience is a virtue for just about any circumstance including selling your home. Yet sometimes you must sell quickly when a job opportunity arises or you face an abrupt lifestyle change. Assuming your home is in good condition and free of liens, here are several tips to help expedite a sale:
Ask for a Comparable Market Analysis (CMA): Your Berkshire Hathaway HomeServices agent can prepare an informal estimate of your home’s value based on comparable sales in the neighborhood. This includes detailed comparisons of the home's size, age, location and features to determine a reasonable price range for your property. You can then adjust the price based on variables in home and lot size, upgrades, condition and location. The amount may not be what you had envisioned, yet when priced slightly below comparable sales you should attract serious buyers.
Ask about our Progressive Value Range Marketing (PVRM): Many Berkshire Hathaway HomeServices agents use PVRM as an additional pricing resource. Instead of setting a specific price, a value range is selected enabling sellers to entertain offers in a defined range.
Be flexible: Know your bottom price and don’t be offended by offers within those parameters. Consider negotiating housewares and fixtures that may appeal to prospective buyers—such as those expensive new drapes you just installed, the dining-room chandelier or that new washer-dryer combo. Determine what you can and can’t live without.
Remove the clutter: This must be done regardless of time frame. Throw away anything you won’t be taking with you and pack storage items that you won’t miss during the selling process. Rent a storage pod that can be picked up and eventually moved to your new home.
Offer incentives: One popular incentive for a fast closing is to share or pay for your buyer’s closing costs. You may also offer higher commissions for a fast sale, which may lead to even more showings.
Rent to buy: If there’s interest but no one is willing to meet your timeline, offer the chance to rent with the right to buy it in six months or a year. Both parties win, as buyers can experience the home and neighborhood firsthand while you transition with cash flow to cover expenses.
Indeed, selling a home requires time and patience yet there are several things you can do to help expedite the process. With flexibility and creativity, you can increase your chances of a quick sale.
From condos to castles, I'm committed to providing you with world-class real estate service. Whether you're looking to buy or sell, I can offer the highest levels in real estate expertise and professionalism. Feel free to call or text me to schedule a confidential appointment: 424.888.0365.