The single most important factor to consider when selling your home is pricing it correctly; it’s picking the absolute right price tag: how much your house is worth and pricing it to sell.
Pricing your home too high or on the other hand too low without having the right strategy behind it can cost you. And if you’d like to know what the best strategy is for you, head over to planwithmike and let’s have a chat.
Pricing is all about supply and demand. It’s part art and part science, and no two agents price property the same way. Some agents are much better at figuring out how to price your home than others.
Today I will go over with you the basics of a Comparative Market Analysis (CMA) and in the next video I’ll go over Comparable Sales and what they are.
let’s get started.
Comparative Market Analysis
Before putting your home on the market or listing it with an agent, you should obtain a comparative market analysis, also referred to in the industry as a CMA which is a process that helps you figure out he price of your home.
What is a Comparative Market Analysis?
Although reports can vary, from a two-page list of comparable home sales to a 50-page comprehensive guide, the length and complexity of the report depends on the agent’s business practice.
However, standard comparative market analysis reports contain the following data:
Active listings are homes currently for sale. These listings matter only to the extent that they are your competition for buyers. They are not indicative of market value because sellers can ask whatever they want for their home. It doesn’t mean any of the prices are realistic. The offered sales prices do not reflect market value until they sell, and in buyer’s markets, for example, most sell for a lot less.
Pending sale homes are formerly active listings that are under contract. They have not yet closed, so they are not yet a comparable sale. Unless the listing agent is willing to share information about the pending sale — and many are not — you will not know the actual sold price until the transaction closes. However, pending sales do indicate the direction the market is moving. If your home is priced above the list price of these pending sales, you could face longer DOM.
Homes that have closed within the past three to six months are your comparable sales. These are the sales an appraiser will use when appraising your home for the buyer, along with the pending sales (which will likely have closed by the time your home is sold). Look long and hard at the comparable sales because those are your market value.
Off-Market / Withdrawn / Canceled
These are properties that were taken off the market for a variety of reasons. Usually, the reason homes are removed from the market is because the prices were too high. The median prices of this group will almost always be higher than the median prices of comparable sales. However, listings cancel also for the following reasons:
– Seller’s remorse. The sellers decided they can not part with their home and no longer want to sell.
– Priced too high. Nobody made an offer or the only offers received were low-ball offers, which were rejected.
– The DOM were too long. Agents sometimes withdraw listings so they can put them back as a new listing and fool buyers.
– Repair requests. The homes were once under contract and after the home inspection, the buyer requested repairs which the seller refused.
– Seller fired the agent. It’s not uncommon for unhappy sellers to fire an agent and hire a new agent.
This group will reflect the highest median sales price because they did not sell and were probably unreasonably priced. Some of the expired listings could also show up as an active listing, listed by a new agent at a new price. Listings also expire because they were not aggressively marketed or because the home was in need of repairs.
I’ve put together for you a quick check list that you can follow to price your home, just send me a message and I’ll send a copy your way.
Here’s The Bottom Line.
Properly done CMA is key in arriving at the proper price for your home.
Just takes a bit of research and some knowledge.
If you’re looking for someone that can help you with that
Here’s Some Great News.
I’ve set aside some time to personally take a look at what you’ve got, and what you want to achieve going forward, and I will help you come up with a strategic plan of action …FREE.
This is genuinely free offer, and there are no strings attached.
In fact, it’s even better than you realize.
Not only would I design a marketing plan for you, I will also create a detailed blueprint of exactly how it works and give you that as well.
If that sounds interesting to you …
Here’s What To Do Next.
Head over to planwithmike click on the get started button, select a time that works for you and you’re set. Look forward to hear from you.