Thinking about listing your property this spring? Then now’s the time to request a comparative market analysis (CMA) from your real estate agent. A CMA is an evaluation of listings and sale prices of similar houses in your neighbourhood. Similar to an appraisal in that it provides sellers with an estimate of their home’s market value, a CMA can help you be objective about the true value of your home.
CMAs can also be useful for home buyers and homeowners. Buyers can use a comparative market analysis to ensure that they aren’t overpaying for a property, while homeowners often consult a CMA as part of mortgage refinancing application. A CMA will show whether or not the value of your home is high enough to qualify you for a better mortgage rate. A comparative market analysis can also be useful if you’re in need of a second mortgage. For more information on the benefits have performing a comparative market analysis as part of your refinancing application please contact a mortgage broker directly.
Data Doesn’t Lie
Most comparative market analysis reports contains information on the following:
This section of the CMA offers a detailed outline of the listings currently on the market in your neighbourhood. These homes are in direct competition to your listing; as such, it’s important that you take their price breakdowns into account. If you price your home above the list price of pending sale properties, chances are good you’ll have difficulties selling quickly.
The pending listings portion of your CMA will contain information about homes that are no longer on the market, but are still under contract. These homes have received an offer and are currently in the process of closing. Since these properties are still technically open, you won’t be able to access the exact sale price. With that being said, pending sales are indicative of the direction that your local real estate market is moving in. As such, it’s worth noting the list price of these properties when putting together you own listing.
This is the most important part of your CMA. This portion will normally contain a listing of the homes that have closed in your neighbourhood over the past three to six months. This will include their list price and their final sale price.
Expired, Off-market, Withdrawn, and Otherwise Cancelled Listings
If you’re worried that you’re overpricing your property, be sure to take a long hard look a this portion of your CMA. This section of the report will provide a good indicator of the highest median sales price of homes in your median.
Look for Comparable Properties
Comparative market analysis are most useful when you can pinpoint properties that are similar in size, shape, and condition to your own. You can then use these listings to influence your pricing strategy.
When reviewing listings for comparable properties, look for the following factors:
- Similar square footage
- Similar age and construction type
- Similar amenities and upgrades
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