Setting the right price from the start is the most important step toward successfully selling your home. This requires taking a close look at what other houses are selling for to judge the relative value of your home. A good CMA will take the following into consideration:
Examining Comparable Sales – A comparative market analysis gives you information about houses similar to yours (in size, amenities, and location) that are either on the market, have sold, or were listed within a reasonably recent time period.
Similar square footage – Appraisers compare homes based on square footage. The variance among a group of median-priced homes ideally should not exceed more than a 10% to 20% variance in square feet, plus or minus.
Similar age of construction – Ideally, the age of the home — the year it was built — should be within a few years of other comparable sold homes.
Similar amenities, upgrades, and condition – Appraisers will deduct value from your home if other homes have upgrades and yours does not. A home with a swimming pool will have a different value than a home without a pool. Pools aren’t worth as much as you think. A completely remodeled home is worth more than a fixer. Homes with one bath are worth less than homes with two or more baths. Deferred maintenance most likely will count against you.
Location – Everybody knows that real estate is valued on “location, location, location,” but have you considered what that means? There are several factors that go into location, such as: proximity to freeways, shopping, parks, top rated schools, and other such landmarks that might make a neighborhood more desirable.
While the comparative market analysis is not an official appraisal, the real estate agent uses a great deal of similar practices and methods that an appraiser would use to arrive at a reasonable value for the property. If the home or property is so distinctive and/or unique where there are no comparable properties found, it may be in the best interest of the owner to hire a formal appraiser to value the property.