When you decide to sell your home, you’ll be given the option to pursue a comparative market analysis, often referred to as a CMA. A CMA is a tool that helps your real estate agent determine what the asking price of your home will be. This analysis offers an in-depth look at recently sold homes similar to yours and compares them based on size, location, condition, and amenities. This service is offered by your agent’s team and, if successful, offers you an accurate price range to list your home in. We’ve outlined 5 ways that a CMA can help sell your home:
Understand the Value of Your Home in the Market Context
In the past year, the market has shifted towards sellers. This trend hasn’t shown any signs of stopping, but you should understand the general behavior of buyers in your market as well as how to intelligently respond to offers. Especially during a time where bidding wars are so common, it’s important to be knowledgeable about the market and take necessary considerations before responding to offers. A CMA will be helpful in letting you know the listing prices you’re competing against and can deter you from pricing outside of the market, a mistake that unfortunately leads to expired listings and minimal offers. Details about the comparable market such as median listing price, average days on market, months of inventory, and average price per square foot may be great indicators to help you settle on the right price to list at.
Control How Fast Your Home Sells
After a CMA is complete, your real estate agent will provide you with their recommended upper and lower price limits for the listing price. These numbers are based on homes similar to yours with respect to size, location, and amenities. You have to make the decision of where you want to price your home on the scale. If you’re in no rush to sell, pricing your home on the higher end of the CMA’s range will most likely result in a longer period on the market with fewer but more serious offers. Just be wary of an overpriced home when the time comes for an appraisal. If you’d like to sell your home as soon as possible, pricing it a the lower end of the CMA will get you more offers and a potential bidding war as it will be considered a great deal compared to other homes.
Put Your Agent to the Test
When you’re interviewing different agents, take note of which ones will provide a CMA for free. A CMA is a great way to indicate your agent’s dedication to selling your home and general skill level/market knowledge. A well done CMA will be thorough, long, and leave no details out. Here are a few questions to ask yourself to ensure a professionally done analysis:
- Has the agent consulted you about the price range and your desired timeline?
- Does the CMA include photos of the subject properties compared to your own?
- Are there additional features of the CMA such as price per sqft, housing stock age range, and inventory charts?
- Does the CMA include enough comparable homes (ideally 10-12) and can your agents explain why those specific homes were chosen?
Save on the Cost of Appraisal
A CMA can be useful in bridging the gap between an official appraisal value and an online home value estimate that you would find on a site like Zillow. In order to get an appraisal, you’d need to hire a licensed appraiser to assign value to your home and create a report based on their findings. Appraisals are widely trusted for their accuracy but can cost upwards of $500. An appraisal is necessary for closing, but not to gauge pricing. A CMA won’t usually cost anything and it’s likely to be close to an appraised value. A highly skilled real estate agent should be able to determine what your home will eventually appraise for so that there aren’t any surprises during closing.
A CMA helps to settle on a reasonable listing price for your home while accounting for the broader market as well as the little things that make your home special. It’s important to understand the importance of the realistic assessment of your home’s market value and the benefits that a CMA can have in the process of selling your home. Want to know more? Contact us today!