Determining the value of one’s home is not as simple as modern depictions may lead you to believe.
In today’s world, we are accustomed to receiving almost any amount of information we desire within seconds at a few clicks of a button. So, why should the price of our homes be any different?
Although popular websites and apps can provide estimates and data regarding your property, it doesn’t make that information necessarily accurate. Often, these websites can have a plethora of eras and little to no first-hand experience viewing your home and its many features and benefits.
Equally as important, it can be hard to receive a true evaluation of one’s home without the help of an expert who can identify and assess comparable homes that are selling and those homes which have sold in your market.
Not to worry, your home has a real value that can be determined through data and not just guesswork, and it all starts with three little letters: CMA.
A CMA or Competitive Market Analysis is the report Realtors use to find the actual value of your property. Any Realtor providing top-level service is capable of producing a CMA before you list your home.
The real estate market is in a constant state of movement and changes depending on a myriad of factors. What a CMA does is paint a fundamental picture of your property’s marketplace to determine the value of your home.
A CMA is prepared by a Realtor and takes into account the features and benefits your home possess such as the number of bedrooms, how many stories your home possesses, if you have a pool, etc., and then takes a look at your home by comparing them to other homes with the same features and benefits in your area. This is typically broken down into two distinct lists:
The purpose of looking at homes currently on the marketplace with the same features as yours is to gain a greater insight into your competition and market conditions. For example, if you are looking at homes in your area and see that they are typically set at a certain price yet have been staying on the market for extended periods, it can tell you a lot about the demand for homes of your nature versus the prices being set for them.
Additionally, this allows you to see how your competition is pricing their home, homes that will directly compete against yours when buyers are making their purchasing decisions. Knowing your competition is important so that you aren’t pricing yourself outside of your market and unable to sell your home.
Researching homes that have sold in your market will give you a valuable piece of information: the price at which homes like yours are selling within your marketplace.
While this can be a tough pill to swallow for some sellers, the reality is that if you price your home out of the market, in many cases, you would be better off not listing it at all. The point of listing your home is to ensure it is sold. An excellent real estate agent is going to work also to ensure you receive top dollar for your investment. With that said, even the most seasoned agent will be unable to complete the sale of your home if your price does not align with the market.
Taking this information into consideration, looking at the time it takes for homes to sell in your marketplace can also yield a tremendous amount of value for homeowners. If you are in a rush to move or financial situation in which selling your property quickly is imperative, examining the days spent on the market for homes in your area can help you gauge the timeline of listing your home at these prices.
Not everything is going to be the grand feature you perceive for buyers, but there are home improvements that can add value and thus provide adjustments to your home despite other comparable homes being listed within a certain perimeter.
These vary from market to market; for example, a pool is a tremendous feature for any home to possess, but only to those who want the lifestyle that accompanies a pool. Chances are if you are looking to up the value of your home, but your competition all possess pools of equal value, it may be a moot point and harm your listing in the long run.
Other features, however, such as an outdoor patio with specific upgrades like premium marble countertops can add real value to your living space and push your price higher, but be warned. Home improvements are tricky and don’t guarantee a return on investment. Each market and situation is different. Furthermore, going overboard can outprice your home for the market and again end up costing you time and money.
Before going overboard, it is important to speak with your real estate agent and consider large improvements for your own pleasure while smaller improvements, such as new light switches or a fresh coat of neutral paint may be better suggestions when moving.
One of the greatest reasons for having a real estate agent perform a CMA on your home is that if you price your home above the market and someone falls head over heels for it there is still a major issue, they may not be able to buy it.
Let’s say for a minute your CMA shows that your home should be priced around $300,000, but you’ve decided you must list at $380,000. You find a buyer and everything seems to be moving along but then comes the appraisal and the wheels come to a grinding halt. The appraiser, who is kept separate from Realtors as to remain impartial, finds that when the dust settles, your home is at most worth around $305,000.
What does this mean for you as a seller?
It means that when your prospective buyers go to the bank for a loan, at best, they will receive a loan of $305,000 and will be required to come up with the remaining $75,000 on their own. This is assuming they are still interested in the property for that price because it is severely overpriced.
Pricing your home the right way the first time saves time, hassle, and money in the short and long run. Work with your real estate agent and heed their advice when researching your home’s value.
Do you think you’re the only party with a CMA?
In the same manner that your Realtor will prepare a CMA to list your home, buyer agents are also doing their research for locating the right property and strategizing for the negotiations of their client’s interests, not yours.
Outpricing yourself can result in Realtors and homebuyers bypassing your property altogether or fighting heavily throughout the process of negotiating a price should they find interest.
When it comes to listing your home, navigating the market place is best left to the experts, and when it comes to experts in the Lake Houston area, nobody leads the way quite like Amanda Petree.
A consistent leader within her industry and marketplace, Amanda Petree has the experience and knowledge to price your home at a price it will sell for all while maximizing your investment.
Contact Amanda Petree to receive your home’s CMA and see how she can sell your home for top dollar today!