A comparative market analysis plays an important part in a home sale because it gives agents an idea of how to position your home on the market.
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What role does a comparative market analysis play in a home sale?
A comparative market analysis (CMA) is important to determine the value of your home before placing it on the market. The way we agents determine a CMA is by comparing your home with the value of other homes in the neighborhood that have either sold, are pending, or are still on the market.
Of those three categories—active listings, pending listings, and sold listings—sold listings are the most important because they give us a true picture of what homes are selling for. We use pending and active listings to determine other factors. The goal is to pull at least three to five homes that are similar to yours in size, number of bedrooms and bathrooms, and any type of amenities and make adjustments based on that criteria to determine where to price your home.
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A CMA gives agents a good idea how to position your home in the market.
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Ultimately, the buyer is the one who will determine the value of your home, and you can price your home according to your specific situation. If you’re not in a rush for it to sell, you can price it on the higher side. If you need to sell your house contingent on finding a replacement property, then you may price it more aggressively to generate multiple offers.
Pending data tells us where the market is currently at. If a home has been on the market for only five days and is in escrow already, we can assume that it sold pretty close to asking price. Depending on how many properties are active on the market, that will tell us the inventory level and if there is a lot of competition that could affect your pricing.
If you have any questions or have any other real estate needs, feel free to reach out to me. I look forward to hearing from you soon!
