Pricing and the CMA
The Comparative Market Analysis, or “CMA” as it is known in the real estate industry, is the foundation of the home pricing decision, which is one of the most important aspects of the entire home selling process. A properly prepared CMA is as much an art as it is a science. Experience and local market knowledge plays a critical role in preparation. The CMA is an analysis of homes comparable to the “subject property” in an attempt to determine the current fair market value of the subject property. I will look first and foremost at homes of a similar size, style and age that have sold recently in your immediate geographic area. The CMA is not complete until I have had an opportunity to physically tour your home and adjust the results of the CMA to match my observations and conclusions.
Many times sellers would like to establish pricing on how much they paid for or invested in their home. This can be an expensive mistake. If your home is not priced competitively, buyers may reject it in favor of other larger homes for the same price. At the same time, the buyers who should be looking at your house will not see it because it is priced above their price range. The result is increased market time and, unfortunately when the price is eventually lowered, many buyers are wary because “nobody wants to buy a house that nobody else wants”. The result is lower priced offers and an unwillingness to negotiate on the part of the buyer. Every seller wants to realize as much money as possible from the sale of their home, but a listing priced too high often sells for less than market value. My recommendation is to think within a “range of values” that will accommodate not only price but also terms that may be valuable to you in the overall sale process.