If you’ve been thinking about putting your home on the market, you may have a few questions about the process. Namely, how will your real estate agent come up with a fair price for your home? The answer is simple: Your agent will use a comparative market analysis (CMA) determine the right list price.
If you’re curious about how this document helps, read on below. This post will clue you in on what a CMA is, different factors that you should consider when reading over one, and how it will ultimately help you to sell your home.
What is a comparative market analysis?
Put simply, a comparative market analysis is document that real estate agents prepare for their clients when helping them decide on a fair list price for their homes. Though the exact makeup of the report can vary from person to person, it always showcases other, similar properties that are either currently on the market or have recently sold.
The purpose of a CMA is to help sellers get a sense of what their home is worth in the current market. It helps lend social proof to the agent’s suggested list price by providing similar properties – and their sale prices – as a basis for comparison.
Factors to consider when looking at a CMA
That said, no two homes are exactly alike and neither is their pricing. Since a CMA compares multiple properties, it gives the sellers a price range within which their property fits. Whether their property belongs at the high end or the low end of that price range depends on many factors that are unique to the property itself.
Here are some factors that get taken into consideration when pricing a home for sale:
- Square footage and acreage
- Any recent renovations or updates
- The number of bedrooms and bathrooms
- Any amenities
How a CMA can help sell your home
A CMA helps sell properties by providing guidance for the list price. Truth be told, choosing the correct list price is one of the best things that sellers can do to attract interested buyers.
After all, when a property goes on the market, it’s effectively in competition with all of the other available homes in that same price range. If a home is listed too high, it will likely be passed over by buyers in favor of other properties that have more to offer for the price.
However, when a home is priced correctly, buyers are more inclined to want to view the property because they feel that they’re getting enough for the for their money. The more showings a property has, the more likely it is to receive an offer.