Strike while the market is hot By Amy Krikken

What is a comparative market analysis (CMA) and why should you care about getting one? 

That is a great question and one that I intend to answer.

A CMA is a tool used in the real estate industry to determine the value of your home in today's

market.

How is a CMA calculated? 

First and foremost realize that calculating a CMA is not an exact science, our calculations are tied to appraisal value, but not entirely. There are many determining factors such as: the location of your home, the size and condition, number of bedrooms, acreage, and the overall desirability of the home.
Since each house and piece of land that it sits upon is unique, how do we go about determining value?

In other words, how do we compare apples to oranges, how can we compare two houses that may do not have much in common?

Understand that when we calculate the value of your home we use houses that have already sold in that same market within the last six months to a year.

We do not use the asking price, or the price that the home was when it went under contract. We use the price that the home sold for. 

A typical CMA uses three comparative properties to compare against your home.

We then make necessary adjustments based on things like number of bedrooms and bathrooms and overall square footage by either adding or subtracting to balance out our comparisons. In other words, this process helps us compare apples to apples, so that we can more readily compare them to one another and assign a suggested asking price to your home. 

On occasion a homeowner may feel that this number is too low, and they wish to put their home on
the market for a higher price. The danger in that strategy is that buyers have access to lots of information these days, and if they have been looking and educating themselves along the way, they know that the home is overpriced. If the house sits on the market without a reduction (an adjustment to the market price - remember it is always in flux because new homes come into the market weekly) the buying public starts to believe that there may be something wrong with your home, or at the very least, they say to themselves, “It can't be that great, or else it would have already sold.” We do not want this scenario for you! 

Real estate agents want your home to sell! They nudge you in the best direction because experience has taught them that pricing your home fairly, will bring more buyers toward your home, and may even result in you actualizing more profit on the sale. Multiple offer situations are happening every day in this market, so price correctly the first time to capitalize on the buying audience within the first two weeks of listing your home. 

Most people reach out to a real estate agent when they are looking for a comparative market analysis, to get an idea of what their house may command in the market, should they decide to sell. However, it’s always a good idea to have a general idea about what your home is worth. Who knows, you might like the number so well that you decide you want to sell. Homes are going under contract in under a week because inventory is so low. 

Knowledge is power, and I am here to help encourage you to know what your home is worth, instead of guesstimating. 

Call a professional. Call The Rock Star Realtor, Amy Krikken of Better Homes and Gardens/Masiello at 207-317-1338.