So you're thinking of selling your home. How much do you think it's worth?
No doubt you've heard you should figure this out by asking your real estate agent for a CMA, or Comparative Market Analysis. But what is a CMA? A comparative market analysis estimates a property's value based on recent closed sales of similar properties in the same market. When you're hoping to sell your place, understanding the CMA is essential. Here's what you need to know.
As your real estate agent, when I create a CMA for your property, I research comparables (AKA comps)—recently sold properties that are similar to your property. Comparable homes are in the same or similar neighborhoods, have similar interior living area and number of bedrooms/bathrooms, and have similar features, and upgrades. I gather this data from the MLS and from my experience touring and showing those properties.
It is very important to use data from sold properties and not the listing prices of homes currently on the market. Listing prices are not always realistic prices. Those numbers could be inflated based on what home sellers' hope they'll get, or sometimes sellers will purposely underprice their property to get more interest fast. To accurately reflect what a buyer will actually pay for a property your CMA should be primarily based on the final sales prices of homes.
You may be thinking, Oh, so a CMA is like a Zestimate from Zillow.com
. But stop right there. There is a difference! Yes, you can punch in your address to any number of online estimators but the difference is those online algorithms have not walked through the houses, talked to the listing agents, or know the neighbors. Online home-value calculators are a great place to start but they aren't the end all, be all. Like all automated tools, they can't take everything into consideration that a human could. Instead consider it a springboard for further research you and I can explore.
Back to the comps. Once I have found at least 3-6 good comps for your property things get a little more nuanced. This is where condition, curb appeal, and extras come into consideration. I don't compare a fixer-upper with an upgraded property. But sometimes I have to compare homes with slightly different features or in slightly different styles or neighborhoods. This is where market knowledge about what buyers currently find desirable, comes in handy. Every area of the island will have different things that are desirable, and upgrades and extras will be worth more in some areas than they are in others.
The final strategy to hone your CMA further is applying my knowledge of transactions currently in escrow. I can get the inside scoop on multiple offers, appraisal issues, problems found during inspections, and whether there were concessions for closing costs or repairs. I get this information from my own escrows and from talking to other agents. This up-to-the-minute snapshot of where the market is headed is used to fine tune your CMA and can also explain weird or lowball comps that pop up that would otherwise throw off your on-line valuations like Zestimates.
The CMA I provide to you is a reliable valuation of your property based on current data, market knowledge, and experience. It is more than an automated estimate spit out by algorithims. It will help guide you in setting an appropriate listing price and preparing your home for sale.
Are you looking to sell your property? Contact me to get info on your home's value and request a CMA.
Dani Dooley is a Realtor in Kauai, Hawaii. She was awarded the Coldwell Banker International Diamond Society in 2020 for being in Coldwell Banker's top 11% of agents internationally. She is ePro certified and a Certified Luxury Home Marketing Specialist (CLMHS). Follow @DaniDooley.Kauai.Realtor