As a Licensed Real Estate Salesperson, for more than a decade, I have been asked countless times, why a homeowner is better off using a real estate professional, rather than trying to sell his home, on his own (FSBO). While there are numerous answers to this question, one of the most essential, is how one determines the best listing price, to offer for the property. Homeowners, often because of their emotional connection, while at other times, either, because of lack of specific, relevant knowledge in this field, or greed, may become their own worst enemy, because they either ask too little, or more often, too much. Doing either of these generally negatively impacts the eventual selling price. Let’s, therefore, consider 4 key considerations, which goes into effectively preparing a Comparative Market Analysis (CMA).
1. Look/ examine carefully; analyze thoroughly; consider the strengths/ weaknesses: This process must be done professionally, and consistently! Look at listing prices, but do so, more to see how listing either too high or too low, impacts the eventual sales price! The analysis must look at the actual price similar homes sold at, in the past few months. This period, especially in today’s market, must be a relatively short one! Also consider the specific property’s strengths and weaknesses, and other factor which might either make it more or less valuable than others. Also, know your competition (houses currently on market).
2. Houses sold last 3 – 6 months: What was the original listing price and what did it sell for? What style of house, and what condition, were the selected houses? How long was it listed on the market, before selling, and why? (Time on Market = T.O.M.)
3. Expired listings: Why did the homes, which did not sell (expired), end up that way? Was the undesired result, because of the listing price, market – place, or conditions, or for some other reason? It is important to know, how significant, knowledge must be, in every component of this evaluation/ examination!
4. Houses on market: When comparing the target property, to others currently for sale, on the market, do not merely look at pricing, but also consider/ evaluate features, location, etc. How does the specific house compare, objectively? Is it a better or less desirable location? How does the property lot compare (flat/ usable versus hilly), size, usable size, condition, curb appeal, etc?
Don’t merely compare, but do so, with knowledge and professional guidance! Since, for most people, their home is their most valuable asset, doesn’t it make sense to do so?
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Source by Richard Brody