This is how we arrive at the recommended list price for your home. It is a personalized profile of what is happening in your neighborhood’s real estate market, and how it affects the price of your home.
The market value of your home is commonly determined by comparing it to the value of other homes that have recently sold in the area, or are currently listed on the market. It is an art and a science.
Using information that is available to your real estate agent, they can find comparable homes by number of bedrooms, bathrooms, square footage, lot size, and an untold number of additional features. Then, using the information about how much those homes have sold for, or are being listed for, they can determine what your home’s fair market value is.
Decisions must be made about how to adjust the value of your property as compared to other homes. If an active listing is being used for comparison, and has been on the market for over 90 days, it’s safe to assume it’s overpriced and that people won’t pay that much for your home unless it’s in better condition or has more premium features. If your home is the only one on the block with a jacuzzi, your value goes up as compared to the others.
In order to be as accurate as possible, your agent must look at your home to evaluate its condition, and get a sense for how it fits into the neighborhood. By drawing accurate conclusions from an accurate set of data, your home will be priced correctly.
Note: The CMA, as you can see, requires a lot of technical experience, neighborhood knowledge, and critical thinking on behalf of your agent. A poorly executed CMA might compare your property to other properties that are not similar, or it might draw the wrong conclusions from the data.
If you would like me to prepare a CMA for your property, which I do free of charge, you can click on the “What’s My Home Worth?” button at the top-right corner of this website at any time.