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If you’re thinking of selling your home, one crucial element is ensuring it’s accurately priced. That’s why many sellers have their real estate agent prepare a Comparative Market Analysis (CMA). Read on to learn about the benefits of a CMA and how it’s different from an appraisal.
An Appraisal vs. a Comparative Market Analysis
Sometimes people confuse a Comparative Market Analysis with an appraisal. A licensed appraiser conducts an appraisal on behalf of the bank, whereas a CMA is conducted by a real estate agent. When a home buyer applies for a loan to purchase your property, the bank orders an appraisal. Both appraisers and agents use research-based comparison methods, but bank appraisers do not have a vested interest in the home’s sale. The appraiser determines your home’s fair market value. They want to ensure the bank is not lending more than needed.
For a CMA, an agent uses their knowledge of the local market and data from the Multiple Listing Service (MLS) on sold homes and market trends. A Comparative Market Analysis helps price the home more accurately, keeping the property competitive in the current market.
Know Where Your Property Stands in Your Local Market
A CMA compares your home to other local homes in your area that have been on the market in the past three to six months. Comparable homes share some of the same characteristics as yours, such as condition, square footage, and property size. If you have a good real estate agent, you’ll receive a thorough CMA so that you know:
- What local homes are selling for
- How long homes in your area were on the market
- The delta between their listing and sold price
- A low, median, and high selling price for your property
All of this data will be factored into the pricing of your home. The last thing you want is for your home to sit on the market because it wasn’t correctly priced due to how it compares to other homes in your area, and/or in light of your current local real estate market. To learn more about our current real estate market here in Kitsap County, Washington, check out our quarterly market videos.
Manage Expectations
While there are many great real estate stories about multiple offer situations, it’s important to start the selling process with a pragmatic, data-driven approach. You’ll be able to manage your expectations, plan effectively, and have a clear roadmap for your selling timeline. Without it, you may risk assuming your home sale will be just like your neighbor’s, or expect it to sell rapidly simply because of when you’re listing it.
Make Informed Decisions
A Comparative Market Analysis can also help you understand what you may need to do to improve your property’s potential price. And, if you realize you want to invest a bit more in your home to sell it for more, you may want to consider the Windermere Ready Program. It can provide you with a loan to cover home improvement costs before selling.
There’s so much to be aware of when selling a house, and a Comparative Market Analysis can be a great place to start. It will help you dig into the details and understand how to best position it with your agent.
If you have any questions about selling or CMAs, feel free to contact one of our local real estate agents.
