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Sellers Advice: Using a CMA to Sell Your Home
You've made the decision to sell your home. You have cleaned out the closets, decluttered the rooms, and put a fresh coat of paint on the front door. Now you need to list it. But how much do you list it for? The right price is not what you "want" or "think" your home is worth. So you may ask, "How do I determine how much I should ask for my home?"
What is a CMA?
A Comparative Market Analysis or CMA is the most common tool for determining the appropriate price of your home. Short of a professional appraisal, it is the best tool for coming up with an accurate estimate of how much your home should sell for. Cressy & Everett real estate agents can help you determine the best listing price for your home using a targeted CMA.
A CMA provides data on the prices of comparable homes that have sold recently, as well as those currently on the market (your "competition"). Whenever possible, your real estate agent will include homes that are pending, as well as those that were recently on the market but that did not sell. Your CMA will also provide information on how long it took each home to sell. All of these data points are important when setting expectations for selling your home.
Pending sales are of particular interest because they provide the most recent data available. Your agent will compare "pending" and "sold" prices to the list prices on those homes and will identify trends. For example, if pending sales or recent sales show that most homes are selling at 10 percent less than the asking price, you may want to consider increasing your asking price by 10 percent. Likewise, homes that sell above asking price are a good indication that the market is hot and your house may sell fast.
While you may think you can set the price of your home by looking online at what other houses are listed for, the listing price is only a "wish price." The actual sales price is a much more accurate gauge as to the value of the home you are selling, at least if the sale occurred recently (within the last 90 days).
The most important factors for homes used in a CMA are:
- Geography - Only homes in your area matter. Location is a key factor in home value, so your realtor will limit your evaluation to "like" homes within a three- to five-mile radius. Within the same sub-division is typically the best.
- Type – If you live in a single-family home, you'll want to see a CMA that focuses on single-family homes. The same applies to townhomes or condominiums.
- Age– You can't really compare a new home to a home that is 30 years old. They are in a different category, so even if your home has been updated, it will be compared to homes that were built within a few years of your own.
- Amenities – Your CMA should compare a three bedroom, two bath home to other 3/2s in order to get a good comparison.
- Size – Square footage is important in home sales, but you don't necessarily have to compare homes with the exact same square footage. Your realtor can calculate the average cost per square foot of recently sold homes and then multiply that number by the square footage of your home.
When you are ready to sell your SW Michigan home, contact Cressy & Everett Real Estate or expert advice, a formal CMA, and agents who really care.
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