An impartial evaluation of market trends and activity is the most effective way to estimate a property’s fair market value.
The Comparative Market Analysis (CMA)
Since location and property characteristics are the key elements in determining property value, we need to use similar (comparable) properties in your area to establish the basis for valuation.
A Comparative Market Analysis (CMA) considers similar properties that…
Are currently on the market (active listings)
These are properties that will be competing with your home for the attention of available buyers
Have pending sales at this time
This shows homes that are currently under contract, but have not yet closed. Since these properties have not closed, their market value has not become public knowledge. However, these properties are a good indicator of the value of the current market and the list prices that are attracting “real buyers.”
Have sold in the recent past
This shows us what “real buyers” in this market have actually paid for properties that are similar to yours
Failed to sell
These are properties that have been withdrawn from the market or have expired listing periods. Understanding why these properties did not sell can help us avoid disappointment in the marketing of your property. The listed price of these homes may suggest prices that are higher than buyers are willing to pay.
The Comparative Market Analysis considers the asking prices, relative quality, and the quantity of properties that are competing with your home on the market to help us establish a pricing strategy.
Factors that DO NOT affect “market value”
When considering the value of your home, it is important to note that the following factors have little or no influence on the market value of your house:
- The price that you originally paid for the property
- The profit or returns that you expect to receive from the sale of your property
- The amount of cash you need from your sale
- The amount that you have invested in property improvements*
- The tax assessed value of your home
- What other sources have told you your property is worth, including friends, appraisers, online automated valuation sites other real estate professionals.